The United Provinces Sugar Company Ltd., , Kolkata V. ITO, Ward - 12(2), Kolkata

ITA 1956/KOL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7516 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-02-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M SURANA; P K SANGHAI C
• Keywords: Capital asset; Depreciation; Income from undisclosed sources; Search and seizure; Document seized; Source of fund; Question of law; Block assessment; Right to appeal; Capital receipt; Documents seized; Unabsorbed depreciation; Reassessment proceedings; Set aside; Capital Gains
• Section: 143(3); 142(1); 260A; 115JB; 250; 251; 64; 43; 48; 13; 119; 22; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI ABY T. VARKEY, HONBLE JUDICIAL MEMBER) ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD.........................................................APPELLANT 1 ST FLOOR, CHARTERED BANK BUILDING 4, NETAJI SUBHASH ROAD KOLKATA 700 001 [PAN : AAACT 4947 L] VS. INCOME TAX OFFICER, WARD-12(2), KOLKATA................................................RESPONDENT APPEARANCES BY: SHRI S.M. SURANA ADVOCATE & SHRI P.K. SANGHAI, C.A., APPEARED ON BEHALF OF THE ASSESSEE. SHRI TAJINDER PAL SINGH, CIT, D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : FEBRUARY 22 ND , 2021 DATE OF PRONOUNCING THE ORDER : APRIL 1 ST , 2021 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 4, (HEREINAFTER THE LD. CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 19/07/2018, FOR THE ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SUGAR AND IT BY-PRODUCTS, GENERATION OF POWER AND OTHER BUSINESS. IT FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 27/09/2013 DISCLOSING TOTAL INCOME AS NIL. THE ASSESSING OFFICER SELECTED THE CASE FOR SCRUTINY AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 21/12/2015, DETERMINING THE TOTAL LOSS AT RS. 19,60,55,913/-. HE DETERMINED INCOME FROM BOTH SHORT TERM CAPITAL GAINS AND FROM LONG TERM CAPITAL GAINS AT RS.33,83,89,890/- AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE UNDER THE NORMAL PROVISIONS OF THE ACT AT RS.14,23,83,070/-. THE ASSESSING OFFICER DID NOT COMPUTE THE BOOK PROFITS U/S 115JB OF THE ACT. HE DID NOT CONSIDER THE ISSUE AS TO WHETHER BOOK PROFIT IS TO BE COMPUTED U/S 115JB OF THE ACT. 2.1. AGGRIEVED WITH THE DISALLOWANCE MADE BY THE ASSESSING OFFICER, WHILE ASSESSING THE TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE ACT, THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE ASSESSEE ALSO AGITATED THE NON-GRANT OF SET OFF OF, BROUGHT FORWARD UNABSORBED DEPRECIATION UNDER THE LONG TERM CAPITAL GAINS DURING THE YEAR. THE LD. FIRST APPELLATE AUTHORITY DECIDED ALL THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, IN FAVOUR OF THE ASSESSEE, BY DELETING 10% ADHOC DISALLOWANCE MADE TOWARDS TRAVELLING EXPENSES AND 10% ADHOC DISALLOWANCE MADE TOWARDS OF BR OUGHT FORWARD DEPRECIATION OF EARLIER YEARS. ON THE ISSUE OF GRANT OF UNABSORBED BROUGHT FORWARD DEPRECIATION HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. HE DIRECTED THE ASSESSING OFFICER TO GRANT S OF UNABSORBED DEPRECIATION ON LONG TERM CAPITAL GAINS AND PASS A SPEAKING ORDER AND DETERMINE THE BALANCE AMOUNT OF UNABSORBED DEPRECIATION RESULTED IN THE CAPITAL GAINS BEING REDUCED TO NIL. THUS, THE COMPUTATION OF INC BY THE ASSESSEE DISCLOSING THE TOTAL INCOME AS NIL UNDER NORMAL PROVISIONS OF THE ACT WAS UPHELD BY THE LD. CIT(A). THEREAFTER, THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAS NOT COMPUTED INCOME OF THE ASSESSEE U/S 115JB OF THE ACT, I.E. ASSESSEE SUBMITTED THAT IN THE ABSENCE OF ANY TAXABLE INCOME UNDER THE NORMAL PROVISIONS AND TAX BEING COMPUTED THEREON, THE COMPUTATION PROVISION FOR CALCULATING TAX U/S 115JB OF THE ACT FAILS AND HENCE TH ASSESSEE COMPANY. FOR THIS PROPOSITION, THAT MAT PROVISION DOES NOT APPLY TO THE ASSESSEE COMPANY, WHEN THE TAXABLE INCOME IN ACT, THE ASSESSEE RELIED ON THE JUDGMENT OF THE HONBLE J CASE OF CIT VS. M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 359 OF 2006, G.A. NO. 3015 OF 2006, FOR ASSESSMENT YEAR 2002- 03, JUDGMENT DT. 20/11/2006 BENCH OF THE TRIBUNAL IN THE CASE OF 1504/KOL/2008, ORDER DT. 31/03/2008. BY THE CHARTERED ACCOUNTANT IN FORM NO. 29B, CERTIFYING THAT MAT PR OF THE ACT ARE NOT APPLICABLE TO THE ASSESSEE COMPANY HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE. THIS FORM NO. 29B, WAS FILED ALONG WITH THE RETURN OF INCOME. THE LD. CIT(A) INVOKED HIS POWER U/S 251(1)(A) R.W.S. 251(2) OF THE AC T AND ISSUED A SHOWCAUSE NOTICE TO THE ASSESSEE, AS TO WHY HE SHOULD NOT EXERCISE HIS POWERS OF ENHANCEMENT UNDER THE ACT AND ASSESS THE INCOME OF THE ASSESSEE U/S 115JB OF THE ACT. FOR THE PROPOSITION THAT HE HAD POWERS OF ENHANCEMENT ON THIS ISSUE, HE RE LIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SYNDICATE [53 ITR 229 (SC)] ACCOUNTANT THAT IN ABSENCE OF POSITIVE PROVISIONS ARE NOT APPLICABLE, IS CONTRARY TO LAW. ON THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT COMPUTED INCOME U/S 115JB OF THE ACT AND CONSEQUENTLY 2 THE UNITED PROVINCES SUGAR COMPANY LTD. 10% ADHOC DISALLOWANCE MADE TOWARDS MISCELLANEOUS EXPENSES AND OUGHT FORWARD DEPRECIATION OF EARLIER YEARS. ON THE ISSUE OF GRANT OF UNABSORBED BROUGHT FORWARD DEPRECIATION AGAINST LONG TERM CAPITAL GAINS, THE LD. CIT(A) HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. HE DIRECTED THE ASSESSING OFFICER TO GRANT S OF UNABSORBED DEPRECIATION ON LONG TERM CAPITAL GAINS AND PASS A SPEAKING ORDER AND AMOUNT OF UNABSORBED DEPRECIATION TO BE CARRIED FORWARD RESULTED IN THE CAPITAL GAINS BEING REDUCED TO NIL. THUS, THE COMPUTATION OF INC BY THE ASSESSEE DISCLOSING THE TOTAL INCOME AS NIL UNDER NORMAL PROVISIONS OF THE ACT WAS THEREAFTER, THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAS NOT COMPUTED INCOME OF THE ASSESSEE U/S 115JB OF THE ACT, I.E. , UNDER MAT PROVISIONS. ON A QUERY, THE ASSESSEE SUBMITTED THAT IN THE ABSENCE OF ANY TAXABLE INCOME UNDER THE NORMAL PROVISIONS AND TAX BEING COMPUTED THEREON, THE COMPUTATION PROVISION FOR CALCULATING TAX U/S 115JB OF THE ACT FAILS AND HENCE TH IS SECTION 115JB IS NOT APPLICABLE TO THE ASSESSEE COMPANY. FOR THIS PROPOSITION, THAT MAT PROVISION DOES NOT APPLY TO THE WHEN THE TAXABLE INCOME IN NIL- UNDER THE NORMAL PROVISIONS OF THE THE ASSESSEE RELIED ON THE JUDGMENT OF THE HONBLE J URISDICTIONAL HIGH COURT IN THE CIT VS. M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 359 OF 2006, G.A. NO. 3015 OF 2006, 03, JUDGMENT DT. 20/11/2006 AND THE ORDER OF THE KOLKATA A BENCH OF THE TRIBUNAL IN THE CASE OF NEERAJ VANIJYA P. LT D. VS. ITO IN ITA NO. 1504/KOL/2008, ORDER DT. 31/03/2008. THE ASSESSEE ALSO REFERRED TO THE CERTIFICATE ISSUE BY THE CHARTERED ACCOUNTANT IN FORM NO. 29B, CERTIFYING THAT MAT PR OVISIONS U/S 115JB ARE NOT APPLICABLE TO THE ASSESSEE COMPANY I N VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE. THIS FORM NO. 29B, WAS FILED ALONG WITH OF INCOME. THE LD. CIT(A) INVOKED HIS POWER U/S 251(1)(A) R.W.S. 251(2) OF T AND ISSUED A SHOWCAUSE NOTICE TO THE ASSESSEE, AS TO WHY HE SHOULD NOT EXERCISE HIS POWERS OF ENHANCEMENT UNDER THE ACT AND ASSESS THE INCOME OF THE ASSESSEE U/S 115JB OF THE ACT. FOR THE PROPOSITION THAT HE HAD POWERS OF ENHANCEMENT ON THIS ISSUE, LIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KANPUR COAL SYNDICATE [53 ITR 229 (SC)] . HE HELD THAT THE CERTIFICATE ISSUE BY THE CHARTERED IN ABSENCE OF POSITIVE GROSS TOTAL INCOME AND TOTAL INCOME ARE NOT APPLICABLE, IS CONTRARY TO LAW. ON THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT COMPUTED INCOME U/S 115JB OF THE ACT AND CONSEQUENTLY ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. MISCELLANEOUS EXPENSES AND ALSO GRANTED SET OFF OUGHT FORWARD DEPRECIATION OF EARLIER YEARS. ON THE ISSUE OF GRANT OF , SET OFF OF LONG TERM CAPITAL GAINS, THE LD. CIT(A) HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. HE DIRECTED THE ASSESSING OFFICER TO GRANT S ET OFF OF UNABSORBED DEPRECIATION ON LONG TERM CAPITAL GAINS AND PASS A SPEAKING ORDER AND TO BE CARRIED FORWARD . THIS, RESULTED IN THE CAPITAL GAINS BEING REDUCED TO NIL. THUS, THE COMPUTATION OF INC OME FILED BY THE ASSESSEE DISCLOSING THE TOTAL INCOME AS NIL UNDER NORMAL PROVISIONS OF THE ACT WAS THEREAFTER, THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAS NOT COMPUTED , UNDER MAT PROVISIONS. ON A QUERY, THE ASSESSEE SUBMITTED THAT IN THE ABSENCE OF ANY TAXABLE INCOME UNDER THE NORMAL PROVISIONS AND TAX BEING COMPUTED THEREON, THE COMPUTATION PROVISION FOR CALCULATING IS NOT APPLICABLE TO THE ASSESSEE COMPANY. FOR THIS PROPOSITION, THAT MAT PROVISION DOES NOT APPLY TO THE UNDER THE NORMAL PROVISIONS OF THE URISDICTIONAL HIGH COURT IN THE CIT VS. M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 359 OF 2006, G.A. NO. 3015 OF 2006, AND THE ORDER OF THE KOLKATA A D. VS. ITO IN ITA NO. THE ASSESSEE ALSO REFERRED TO THE CERTIFICATE ISSUE OVISIONS U/S 115JB N VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE. THIS FORM NO. 29B, WAS FILED ALONG WITH OF INCOME. THE LD. CIT(A) INVOKED HIS POWER U/S 251(1)(A) R.W.S. 251(2) OF T AND ISSUED A SHOWCAUSE NOTICE TO THE ASSESSEE, AS TO WHY HE SHOULD NOT EXERCISE HIS POWERS OF ENHANCEMENT UNDER THE ACT AND ASSESS THE INCOME OF THE ASSESSEE U/S 115JB OF THE ACT. FOR THE PROPOSITION THAT HE HAD POWERS OF ENHANCEMENT ON THIS ISSUE, CIT VS. KANPUR COAL . HE HELD THAT THE CERTIFICATE ISSUE BY THE CHARTERED GROSS TOTAL INCOME AND TOTAL INCOME , MAT ARE NOT APPLICABLE, IS CONTRARY TO LAW. ON THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT COMPUTED INCOME U/S 115JB OF THE ACT AND CONSEQUENTLY , THE LD. CIT(A) DOES NOT HAVE POWER TO COMPUTE THE SAME THE ASSESSING OFFICER AT ALL, WAS REJECTED BY THE LD. CIT(A). THEREAFTER, HE REFERRED TO SECTION 115JB OF THE ACT AND HELD THAT THE WORDINGS OF THIS SECTION ARE DIFFERENT FROM THE WORDINGS OF SECTION 115JA AND CONSEQUENTLY, THE JUDGMENT OF THE JURISDICTIONAL H COURT IN THE CASE OF M/S. VISHNU SUGAR MILLS LTD. (SUPRA) CASE OF NEERAJ VANIJYA P. LTD. 8.9., OF HIS ORDER, HE HELD THAT THE DECISION OF ITAT IN THE CASE OF FOR THE ASSESSMENT YEAR 2002 APPLIES, ARE SUB-SILENTIO AND UNFIT TO BE CONSIDERED AS A FACTUAL PRECEDENT. REFERRING TO THE JUDGMENT OF THE KOLKATA BENCH OF THE ITAT IN THE CASE OF INDUSTRIES VS. ACIT (2010) ITA NO. 813/KOL/2010, THE ITAT, DID NOT FOLLOW ITS EARLIER ORDER AND HAD ADMITTED AN INADVERTENT ERROR. THEREAFTER, HE RELIED ON THE DECISION OF THE LUCKNOW BENCH OF THE TRI ACIT VS. M/S. L.H. SUGAR FACTORY LTD. IN ITA NO. 417 & 418/LKW/2013 AT PAGES 16 TO 20 OF THE ORDER OF THE LD. CIT(A) AND RELIED ON THE SAME AND HELD THAT COMPUTATION OF BOOK PROFITS ASSESSEE AND BOOK PROFITS DETERMINED. FOR THE PURPOSE OF CALCULATING BOOK PROFITS U/S 115JB, HE GAVE CERTAIN DIRECTIONS TO THE ASSESSING OFFICER. HE DISMISSED THE ADDITIONAL GROUNDS TAKEN BY THE ASSE SSEE THAT THE ENTIRE RECEIPT OF RS.42,96,37,937/ RECEIPT AND HENCE, IT SHOULD BE EXCLUDED FROM THE COMPUTATION OF INCOME BOTH UNDER THE NORMAL PROVISIONS OF THE ACT AS WELL AS WHILE COMPUTING BOOK PROFITS U/S 115JB OF THE ACT. THE BASIC CONT ENTION OF THE ASSESSEE OF CAPITAL RECEIPT AND NOT IN THE NATURE OF PROFIT OR GAINS, TAXABLE U/S 45 OF THE ACT AND REALISATION OF CAPITAL DUE TO IMPROVEMENT OF CAPITAL ASSET BY WAY OF EXTERNAL DEVELOPMENT OVE R A LONG PERIOD OF TIME. 3. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON VARIOUS GROUNDS. 4. THE LD. SENIOR COUNSEL, SHRI S.M. SURANA, ISSUES. THESE ARE (A) THAT THE LD. CIT(A) WAS IN ERROR WHILE INVOKING PROVISION U/S 251(1)(A) R.W.S. 251(2) OF THE ACT AND ENHANCING THE INCOME OF THE ASSESSEE. (B) THAT THE LD. CIT(A) WAS WRONG ON THE THE ASSESSEE COMPANY OR NOT, WHEN ADMITTEDLY, THE GROSS TAXABLE INCOME AND THE TO INCOME AS WELL AS THE TAX PAYABLE ARE NIL, BY REFUSING TO FOLLOW THE BINDING DECISION OF 3 THE UNITED PROVINCES SUGAR COMPANY LTD. THE LD. CIT(A) DOES NOT HAVE POWER TO COMPUTE THE SAME , AS THIS ISSUE WAS NOT DEALT BY ASSESSING OFFICER AT ALL, WAS REJECTED BY THE LD. CIT(A). THEREAFTER, HE REFERRED TO SECTION 115JB OF THE ACT AND HELD THAT THE WORDINGS OF THIS SECTION ARE DIFFERENT FROM THE WORDINGS OF SECTION 115JA AND CONSEQUENTLY, THE JUDGMENT OF THE JURISDICTIONAL H M/S. VISHNU SUGAR MILLS LTD. (SUPRA) AND THE ORDER OF THE ITAT IN THE NEERAJ VANIJYA P. LTD. (SUPRA) ARE NOT APPLICABLE TO THE FACTS OF THE CASE. 8.9., OF HIS ORDER, HE HELD THAT THE DECISION OF ITAT IN THE CASE OF VISHNU SUGARS (SUPRA) FOR THE ASSESSMENT YEAR 2002 - 03, WHERE THE PROVISIONS OF SECTION 115JB OF THE ACT AND UNFIT TO BE CONSIDERED AS A FACTUAL PRECEDENT. REFERRING TO THE JUDGMENT OF THE KOLKATA BENCH OF THE ITAT IN THE CASE OF M/S. BAHTKAWA TEA INDUSTRIES VS. ACIT (2010) ITA NO. 813/KOL/2010, ASSESSMENT YEAR 2005 THE ITAT, DID NOT FOLLOW ITS EARLIER ORDER AND HAD ADMITTED AN INADVERTENT ERROR. THEREAFTER, HE RELIED ON THE DECISION OF THE LUCKNOW BENCH OF THE TRI BUNAL ACIT VS. M/S. L.H. SUGAR FACTORY LTD. IN ITA NO. 417 & 418/LKW/2013 , WHICH IS EXTRACTED AT PAGES 16 TO 20 OF THE ORDER OF THE LD. CIT(A) AND RELIED ON THE SAME AND HELD THAT OF BOOK PROFITS U/S 115JB OF THE ACT, HAS TO BE DONE IN THE CASE OF THE ASSESSEE AND BOOK PROFITS DETERMINED. FOR THE PURPOSE OF CALCULATING BOOK PROFITS U/S HE GAVE CERTAIN DIRECTIONS TO THE ASSESSING OFFICER. HE DISMISSED THE ADDITIONAL SSEE THAT THE ENTIRE RECEIPT OF RS.42,96,37,937/ RECEIPT AND HENCE, IT SHOULD BE EXCLUDED FROM THE COMPUTATION OF INCOME BOTH UNDER THE NORMAL PROVISIONS OF THE ACT AS WELL AS WHILE COMPUTING BOOK PROFITS U/S 115JB OF THE ENTION OF THE ASSESSEE IS THAT THE AMOUNT IN QUESTION IS IN THE NATURE OF CAPITAL RECEIPT AND NOT IN THE NATURE OF PROFIT OR GAINS, TAXABLE U/S 45 OF THE ACT AND REALISATION OF CAPITAL DUE TO IMPROVEMENT OF CAPITAL ASSET BY WAY OF EXTERNAL R A LONG PERIOD OF TIME. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON VARIOUS GROUNDS. THE LD. SENIOR COUNSEL, SHRI S.M. SURANA, BASED HIS ARGUMENTS ON ISSUES. THESE ARE (A) THAT THE LD. CIT(A) WAS IN ERROR WHILE INVOKING PROVISION U/S 251(1)(A) R.W.S. 251(2) OF THE ACT AND ENHANCING THE INCOME OF THE ASSESSEE. (B) THAT LD. CIT(A) WAS WRONG ON THE ISSUE AS TO WHETHER SECTION 115JB OF THE ACT, APPLIES TO THE ASSESSEE COMPANY OR NOT, WHEN ADMITTEDLY, THE GROSS TAXABLE INCOME AND THE TO INCOME AS WELL AS THE TAX PAYABLE ARE NIL, BY REFUSING TO FOLLOW THE BINDING DECISION OF ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. AS THIS ISSUE WAS NOT DEALT BY ASSESSING OFFICER AT ALL, WAS REJECTED BY THE LD. CIT(A). THEREAFTER, HE REFERRED TO SECTION 115JB OF THE ACT AND HELD THAT THE WORDINGS OF THIS SECTION ARE DIFFERENT FROM THE WORDINGS OF SECTION 115JA AND CONSEQUENTLY, THE JUDGMENT OF THE JURISDICTIONAL H IGH AND THE ORDER OF THE ITAT IN THE ARE NOT APPLICABLE TO THE FACTS OF THE CASE. AT PARA VISHNU SUGARS (SUPRA) , 03, WHERE THE PROVISIONS OF SECTION 115JB OF THE ACT AND UNFIT TO BE CONSIDERED AS A FACTUAL PRECEDENT. REFERRING TO M/S. BAHTKAWA TEA ASSESSMENT YEAR 2005 -06 , HE HELD THAT THE ITAT, DID NOT FOLLOW ITS EARLIER ORDER AND HAD ADMITTED AN INADVERTENT ERROR. BUNAL IN THE CASE OF , WHICH IS EXTRACTED AT PAGES 16 TO 20 OF THE ORDER OF THE LD. CIT(A) AND RELIED ON THE SAME AND HELD THAT U/S 115JB OF THE ACT, HAS TO BE DONE IN THE CASE OF THE ASSESSEE AND BOOK PROFITS DETERMINED. FOR THE PURPOSE OF CALCULATING BOOK PROFITS U/S HE GAVE CERTAIN DIRECTIONS TO THE ASSESSING OFFICER. HE DISMISSED THE ADDITIONAL SSEE THAT THE ENTIRE RECEIPT OF RS.42,96,37,937/ -, IS A CAPITAL RECEIPT AND HENCE, IT SHOULD BE EXCLUDED FROM THE COMPUTATION OF INCOME BOTH UNDER THE NORMAL PROVISIONS OF THE ACT AS WELL AS WHILE COMPUTING BOOK PROFITS U/S 115JB OF THE THAT THE AMOUNT IN QUESTION IS IN THE NATURE OF CAPITAL RECEIPT AND NOT IN THE NATURE OF PROFIT OR GAINS, TAXABLE U/S 45 OF THE ACT AND REALISATION OF CAPITAL DUE TO IMPROVEMENT OF CAPITAL ASSET BY WAY OF EXTERNAL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON VARIOUS GROUNDS. BASED HIS ARGUMENTS ON TWO MAIN ISSUES. THESE ARE (A) THAT THE LD. CIT(A) WAS IN ERROR WHILE INVOKING PROVISION U/S 251(1)(A) R.W.S. 251(2) OF THE ACT AND ENHANCING THE INCOME OF THE ASSESSEE. (B) THAT ISSUE AS TO WHETHER SECTION 115JB OF THE ACT, APPLIES TO THE ASSESSEE COMPANY OR NOT, WHEN ADMITTEDLY, THE GROSS TAXABLE INCOME AND THE TO TAL INCOME AS WELL AS THE TAX PAYABLE ARE NIL, BY REFUSING TO FOLLOW THE BINDING DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS THE ORDER OF THE ITAT KOLKATA BENCH OF THE TRIBUNAL, ON THIS ISSUE. ON THE FIRST ISSUE, AS TO WHETHER, THE LD. CIT INCOME OF THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER IN HIS ORDER U/S 143(3) OF THE ACT OR IN THE NOTICE GIVEN U/S 142(1) OF THE ACT, HAS NOT EVEN WHISPERED ABOUT THE COMPUTATI SUBMITTED THAT UP TO THE ASSESSMENT YEAR 2005 ASSESSEE HAVE NOT COMPUTED ANY INCOME, WHATSOEVER, U/S 115JB OF THE ACT THE DECISION OF THE JURISDICTIONAL TRIBUNAL. 4. ON MERITS HE SUBMITTED THAT ONLY IN THE ASSESSMENT YEAR 2005 OFFICER COMPLETED ASSESSMENT QUASHED BY THE LD. CIT(A) AND THE TRIBUNAL AS WELL AS THE HON'BLE HIGH COURT HAS UPHELD THIS ORDER OF THE LD. CIT(A) AND SUBSEQUENTLY BASED ON THIS DECISION, NO INCOME WAS COMPUTED U/S 115JB OF THE ACT, WHEREVER THE GTI AND TI, WAS NIL AND THERE WAS NO TAX PAYABLE. HE READ OUT SECTION 251(2) EMPOWERE D TO DECIDE ONLY SUCH MATTERS WHICH ARISE OUT OF THE PROCEEDINGS IN WHICH THE ORDER WAS APPEALED AND IN A CASE WHERE THE ASSESSING OFFICER HAS NOT DEALT WITH AN ISSUE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OR IN THE ASSESSMENT ORDER, THE LD. CIT(A ) HAS NO POWER TO DEAL WITH THE SAME AND ENHANCE THE INCOME OF THE ASSESSEE. FOR THIS PROPOSITION, HE RELIED ON A NUMBER OF CASE GURINDER MOHAN SINGH NIDRAJOG VS. CIT REPORTED IN 348 ITR 170 CIT V. KANPUR COAL SYNDICATE (1964) CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA ( 1967) CIT VS. UNION TYRES REPORTED IN 240 ITR 556 [DELHI] CIT VS. SARDARILAL & CO. [ CIT VS. NATIONAL CO. LTD. 4.1. HE REFERRED TO THE JU DGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF COAL SYNDICATE (SUPRA) , AND SUBMITTED THAT ITAT HAS THE POWER OF ENHANCEMENT. THUS, THE ISSUE CONSIDERED BY THE HON'BLE SUPREME COURT WAS DIFFERENT FROM THE ISSUE ON HAND. THEREAFTER, IN NUMEROUS JUDGMENTS, THE HON'BLE SUPREME COURT AND THE HON'BLE HIGH C PRINCIPLES OF LAW APPLICABLE TO THE POWERS OF ENHANCEMENT VESTED TO THE CIT(A), AFTER 4 THE UNITED PROVINCES SUGAR COMPANY LTD. THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS THE ORDER OF THE ITAT KOLKATA BENCH OF ON THE FIRST ISSUE, AS TO WHETHER, THE LD. CIT (A) HAS THE RIGHT TO ENHANCE THE TOTAL INCOME OF THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER IN HIS ORDER U/S 143(3) OF THE ACT OR IN THE NOTICE GIVEN U/S 142(1) OF THE ACT, HAS WHISPERED ABOUT THE COMPUTATI ON OF INCOME U/S 115JB OF THE ACT. HE SUBMITTED THAT UP TO THE ASSESSMENT YEAR 2005 - 06, THE DEPARTMENT IN THE CASE OF THE ASSESSEE HAVE NOT COMPUTED ANY INCOME, WHATSOEVER, U/S 115JB OF THE ACT THE DECISION OF THE JURISDICTIONAL TRIBUNAL. HE SUBMITTED THAT ONLY IN THE ASSESSMENT YEAR 2005 OFFICER COMPLETED ASSESSMENT , MAKING COMPUTATION U/S 115JB OF THE ACT AND THIS WAS QUASHED BY THE LD. CIT(A) AND THE TRIBUNAL AS WELL AS THE HON'BLE HIGH COURT HAS UPHELD ORDER OF THE LD. CIT(A) AND SUBSEQUENTLY BASED ON THIS DECISION, NO INCOME WAS COMPUTED U/S 115JB OF THE ACT, WHEREVER THE GTI AND TI, WAS NIL AND THERE WAS NO TAX SECTION 251(2) OF THE ACT AND SUBMITTED THAT THE LD. CIT(A) IS D TO DECIDE ONLY SUCH MATTERS WHICH ARISE OUT OF THE PROCEEDINGS IN WHICH THE ORDER WAS APPEALED AND IN A CASE WHERE THE ASSESSING OFFICER HAS NOT DEALT WITH AN ISSUE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OR IN THE ASSESSMENT ORDER, THE ) HAS NO POWER TO DEAL WITH THE SAME AND ENHANCE THE INCOME OF THE ASSESSEE. FOR THIS PROPOSITION, HE RELIED ON A NUMBER OF CASE -LAW INCLUDING:- GURINDER MOHAN SINGH NIDRAJOG VS. CIT REPORTED IN 348 ITR 170 CIT V. KANPUR COAL SYNDICATE (1964) 53 ITR 225 ( SC ) BAHADUR HARDUTROY MOTILAL CHAMARIA ( 1967) 66 ITR 443 CIT VS. UNION TYRES REPORTED IN 240 ITR 556 [DELHI] CIT VS. SARDARILAL & CO. [ 2001] 251 ITR 864 (DELHI) CIT VS. NATIONAL CO. LTD. (1993) 199 ITR 445 (CAL) DGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF AND SUBMITTED THAT THE ISSUE BEFORE THE COURT WAS WHETHER THE ITAT HAS THE POWER OF ENHANCEMENT. THUS, THE ISSUE CONSIDERED BY THE HON'BLE SUPREME COURT WAS DIFFERENT FROM THE ISSUE ON HAND. THEREAFTER, IN NUMEROUS JUDGMENTS, THE HON'BLE SUPREME COURT AND THE HON'BLE HIGH C OURTS HAVE LAID DOWN THE PRINCIPLES OF LAW APPLICABLE TO THE POWERS OF ENHANCEMENT VESTED TO THE CIT(A), AFTER ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS THE ORDER OF THE ITAT KOLKATA BENCH OF (A) HAS THE RIGHT TO ENHANCE THE TOTAL INCOME OF THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER IN HIS ORDER U/S 143(3) OF THE ACT OR IN THE NOTICE GIVEN U/S 142(1) OF THE ACT, HAS ON OF INCOME U/S 115JB OF THE ACT. HE 06, THE DEPARTMENT IN THE CASE OF THE ASSESSEE HAVE NOT COMPUTED ANY INCOME, WHATSOEVER, U/S 115JB OF THE ACT , BY FOLLOWING HE SUBMITTED THAT ONLY IN THE ASSESSMENT YEAR 2005 -06, THE ASSESSING MAKING COMPUTATION U/S 115JB OF THE ACT AND THIS WAS QUASHED BY THE LD. CIT(A) AND THE TRIBUNAL AS WELL AS THE HON'BLE HIGH COURT HAS UPHELD ORDER OF THE LD. CIT(A) AND SUBSEQUENTLY BASED ON THIS DECISION, NO INCOME WAS COMPUTED U/S 115JB OF THE ACT, WHEREVER THE GTI AND TI, WAS NIL AND THERE WAS NO TAX THE ACT AND SUBMITTED THAT THE LD. CIT(A) IS D TO DECIDE ONLY SUCH MATTERS WHICH ARISE OUT OF THE PROCEEDINGS IN WHICH THE ORDER WAS APPEALED AND IN A CASE WHERE THE ASSESSING OFFICER HAS NOT DEALT WITH AN ISSUE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OR IN THE ASSESSMENT ORDER, THE ) HAS NO POWER TO DEAL WITH THE SAME AND ENHANCE THE INCOME OF THE ASSESSEE. 66 ITR 443 ( SC) DGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF KANPUR THE ISSUE BEFORE THE COURT WAS WHETHER THE ITAT HAS THE POWER OF ENHANCEMENT. THUS, THE ISSUE CONSIDERED BY THE HON'BLE SUPREME COURT WAS DIFFERENT FROM THE ISSUE ON HAND. THEREAFTER, IN NUMEROUS OURTS HAVE LAID DOWN THE PRINCIPLES OF LAW APPLICABLE TO THE POWERS OF ENHANCEMENT VESTED TO THE CIT(A), AFTER CONSIDERING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF SYNDICATE (SUPRA) AND OTHER CASES LAID DOWN IN EACH OF THESE CASES DURING THE COURSE OF OUR FINDINGS. THUS, HE SUBMITS THAT THE LD. CIT(A) WAS WRONG IN EXERCISING HIS POWERS OF ENHANCEMENT U/S 251(1)(A) OF THE ACT. ON A QUERY RAISED BY THE BENCH, AS TO WHETHER THE COMPU OF THE ACT, TANTAMOUNT TO TAXING OF THE ASSESSEE FROM A DIFFERENT SOURCE OF INCOME (NEW SOURCE OF INCOME), THE LD. COUNSEL FOR THE ASSESSEE RELIED ON A NUMBER OF DECISIONS AS WELL AS THE CBDT CIRCULAR NO. 13/2001 DT. 09/11/2001, SUBMITTED THAT COMPUTATION OF INCOME U/S 115JB OF THE ACT, IS A SELF CONTAINED CODE. HE SUBMITTED THAT WHEN THE ASSESSING OFFICER HAS NOT DEALT WITH OR CONSIDERED THE COMPUTATION OF PROFITS U/S 115JB OF THE ACT, THE LD. CIT(A ENHANCE THE ASSESSMENT BY BRINGING IN A TOTALLY DIFFERENT SELF CONTAINED COMPUTATION OF BOOK PROFITS SUBMITTED THAT THE KOLKATA D BENCH OF TRIBUNAL IN THE CASE OF MILLS LTD. IN ITA NO. 1761/KOL/2005 & C.O. NO. 189/KOL/2015; ASSESSMENT YEAR 2002 UPHELD THIS ORDER OF THE LD. CIT(A) AND THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF VS. M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 359 OF 2 ASSESSMENT YEAR 2002- 03, JUDGMENT DT. 20/11/2006 THE ISSUE. THUS, HE SUBMITS THAT THE ISSUE IS COVERED IN HIS FAVOUR AND THE LD. CIT(A) WAS WRONG IN HOLDING THAT THIS JUDGMENT IS NOT BIND OR ON THE GROUND THAT IT DOES NOT HON'BLE KERALA HIGH COURT IN THE CASE 280, FOR THE PROPOSITION THAT, WHEN A ALL ASPECTS OF LAW AND FACTS HAVE BEEN TAKEN INTO ACCOUNT AND THE JUDGMENT CANNOT BE DISPUTED ON THE GROUND THAT CERTAIN ASPECTS OF THE CASE WAS NOT CONSIDERED BY THE HON'BLE SUPREME COURT OR CERTAIN PRO THE HON'BLE SUPREME COURT. HE VEHEMENTLY CONTENDED THAT THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IS BINDING ON THE AUTHORITIES BELOW AND THAT THE LD. CIT( ERROR IN FOLLOWING THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF M/S. L.H. SUGAR FACTORY LTD. (SUPRA) JURISDICTIONAL HIGH COURT . HE POINTED OUT TH ORDER IN THE CASE OF M/S. L.H. SUGAR FACTORY LTD. (SUPRA) 5 THE UNITED PROVINCES SUGAR COMPANY LTD. CONSIDERING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF OTHER CASES . WE WOULD BE DEALING WITH THE PROPOSITIONS OF LAW LAID DOWN IN EACH OF THESE CASES DURING THE COURSE OF OUR FINDINGS. THUS, HE SUBMITS THAT THE LD. CIT(A) WAS WRONG IN EXERCISING HIS POWERS OF ENHANCEMENT U/S 251(1)(A) OF THE ACT. ON A QUERY RAISED BY THE BENCH, AS TO WHETHER THE COMPU TATION OF INCOME U/S 115JB OF THE ACT, TANTAMOUNT TO TAXING OF THE ASSESSEE FROM A DIFFERENT SOURCE OF INCOME (NEW SOURCE OF INCOME), THE LD. COUNSEL FOR THE ASSESSEE RELIED ON A NUMBER OF DECISIONS AS WELL AS THE CBDT CIRCULAR NO. 13/2001 DT. 09/11/2001, REPORTED IN 252 ITR ST. 50 AND SUBMITTED THAT COMPUTATION OF INCOME U/S 115JB OF THE ACT, IS A SELF CONTAINED CODE. HE SUBMITTED THAT WHEN THE ASSESSING OFFICER HAS NOT DEALT WITH OR CONSIDERED THE COMPUTATION OF PROFITS U/S 115JB OF THE ACT, THE LD. CIT(A ), DOES NOT HAVE THE POWER TO ENHANCE THE ASSESSMENT BY BRINGING IN A TOTALLY DIFFERENT SELF CONTAINED COMPUTATION OF BOOK PROFITS , NOT DEALT WITH BY THE ASSESSING OFFICER. HE D BENCH OF TRIBUNAL IN THE CASE OF ACIT VS M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 1761/KOL/2005 & C.O. NO. 189/KOL/2015; ASSESSMENT YEAR 2002 UPHELD THIS ORDER OF THE LD. CIT(A) AND THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF VS. M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 359 OF 2 006, G.A. NO. 3015 OF 2006, FOR 03, JUDGMENT DT. 20/11/2006 , UPHELD THE ORDER OF THE TRIBUNAL ON THE ISSUE. THUS, HE SUBMITS THAT THE ISSUE IS COVERED IN HIS FAVOUR AND THE LD. CIT(A) WAS WRONG IN HOLDING THAT THIS JUDGMENT IS NOT BIND ING ON HIM AS IT WAS NOT A SPEAKING ORDER OR ON THE GROUND THAT IT DOES NOT HOLD THE CORRECT LAW. HE RELIED ON THE JUDGMENT OF THE HON'BLE KERALA HIGH COURT IN THE CASE DENNY FERNANDEZ VS STATE OF KERALA FOR THE PROPOSITION THAT, WHEN A COURT DECIDES A PRINCIPLE ISSUE, IT IS PRESUMED THAT ALL ASPECTS OF LAW AND FACTS HAVE BEEN TAKEN INTO ACCOUNT AND THE JUDGMENT CANNOT BE DISPUTED ON THE GROUND THAT CERTAIN ASPECTS OF THE CASE WAS NOT CONSIDERED BY THE HON'BLE SUPREME COURT OR CERTAIN PRO VISIONS OF LAW WERE NOT BROUGHT TO THE NOTICE OF HE VEHEMENTLY CONTENDED THAT THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IS BINDING ON THE AUTHORITIES BELOW AND THAT THE LD. CIT( A) HAS COMMITTED A GRAVE ERROR IN FOLLOWING THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF M/S. L.H. SUGAR FACTORY LTD. (SUPRA) , IN PREFERENCE TO THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT . HE POINTED OUT TH AT THE LUCKNOW BENCH OF THE TRIBUNAL IN ITS M/S. L.H. SUGAR FACTORY LTD. (SUPRA) REFUSED TO FOLLOW THE JUDGMENT ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. CONSIDERING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF KANPUR COAL PROPOSITIONS OF LAW LAID DOWN IN EACH OF THESE CASES DURING THE COURSE OF OUR FINDINGS. THUS, HE SUBMITS THAT THE LD. CIT(A) WAS WRONG IN EXERCISING HIS POWERS OF ENHANCEMENT U/S 251(1)(A) OF THE TATION OF INCOME U/S 115JB OF THE ACT, TANTAMOUNT TO TAXING OF THE ASSESSEE FROM A DIFFERENT SOURCE OF INCOME (NEW SOURCE OF INCOME), THE LD. COUNSEL FOR THE ASSESSEE RELIED ON A NUMBER OF DECISIONS AS REPORTED IN 252 ITR ST. 50 AND SUBMITTED THAT COMPUTATION OF INCOME U/S 115JB OF THE ACT, IS A SELF CONTAINED CODE. HE SUBMITTED THAT WHEN THE ASSESSING OFFICER HAS NOT DEALT WITH OR CONSIDERED THE ), DOES NOT HAVE THE POWER TO ENHANCE THE ASSESSMENT BY BRINGING IN A TOTALLY DIFFERENT SELF CONTAINED CODE FOR NOT DEALT WITH BY THE ASSESSING OFFICER. HE FURTHER ACIT VS M/S. VISHNU SUGAR MILLS LTD. IN ITA NO. 1761/KOL/2005 & C.O. NO. 189/KOL/2015; ASSESSMENT YEAR 2002 -03, UPHELD THIS ORDER OF THE LD. CIT(A) AND THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT 006, G.A. NO. 3015 OF 2006, FOR , UPHELD THE ORDER OF THE TRIBUNAL ON THE ISSUE. THUS, HE SUBMITS THAT THE ISSUE IS COVERED IN HIS FAVOUR AND THE LD. CIT(A) WAS ING ON HIM AS IT WAS NOT A SPEAKING ORDER THE CORRECT LAW. HE RELIED ON THE JUDGMENT OF THE DENNY FERNANDEZ VS STATE OF KERALA 2003 ( 1 ) KLT COURT DECIDES A PRINCIPLE ISSUE, IT IS PRESUMED THAT ALL ASPECTS OF LAW AND FACTS HAVE BEEN TAKEN INTO ACCOUNT AND THE JUDGMENT CANNOT BE DISPUTED ON THE GROUND THAT CERTAIN ASPECTS OF THE CASE WAS NOT CONSIDERED BY THE VISIONS OF LAW WERE NOT BROUGHT TO THE NOTICE OF HE VEHEMENTLY CONTENDED THAT THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH A) HAS COMMITTED A GRAVE ERROR IN FOLLOWING THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF , IN PREFERENCE TO THE JUDGMENT OF THE HON'BLE AT THE LUCKNOW BENCH OF THE TRIBUNAL IN ITS REFUSED TO FOLLOW THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT FOR THE REASON THAT, IT IS NOT THE JURISDICTIONAL HIGH COURT AND SUBMIT TED THAT, T EMPHASISED THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT SECTION 115JB OF THE ACT CANNOT BE APPLIED WHEN BOTH THE GTI & TI ARE NIL AND NOT TAXES ARE PAYABLE. HE PRAYED FOR RELIED. 5. THE LD. D/R, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT SECTION 251(1)(A) OF THE ACT, GIVES VAST POWERS TO THE LD. CIT(A) TO ENHANCE THE ASSESSMENT. HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF KANPUR COAL SY NDICATE TERMINUS WITH THE POWERS OF THE INCOME TAX OFFICER (ITO) AND THERE IS NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL ISSUE /S WHICH WAS NOT RA RESTRICTIONS WHATSOEVER, CAN BE PLACED ON THE POWERS OF THE LD. CIT(A) WHILE HEARING THE APPEAL AND THAT HE LD. CIT(A) HAS ALL THE POWERS THAT THE ORIGINAL AUTHORITY MAY HAVE IN DETERMINING THE ASSESSABLE INCOME IN THE CASE OF ANY ASSESSEE. HE RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT A CERTIFICATE GIVEN BY THE CHARTERED ACCOUNTANT IN FORM 29A OF THE ACT, WITH MAT PROVISIONS U/S 115JB OF THE ACT, IS NOT APPLICABLE TO THE ASSESSEE IS WRONG, A S THE PROVISIONS OF SECTION 115JA AND THE PROVISIONS OF SECTION 115JB ARE DIFFERENT AND THE DECISIONS OR JUDGMENTS APPLIED IN THIS CASE. HE FURTHER RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE JUDGMENT O F THE HONBLE CALCUTTA HIGH COURT, CANNOT BE HELD AS A BINDING PRECEDENT FOR THE REASON THAT, IT WAS NOT A SPEAKING ORDER AND ONLY HELD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW INVOLVED ON THE DECISION OF THE TRIBUNAL THE ASSESSMENT YEAR 2002 - HAS HELD THAT THIS ORDER IS LUCKNOW BENCH OF THE ITAT IN THE CASE OF SUBMIT TED THAT AS PER THE ORDER, SECTION 115JB IS APPLICABLE TO THE FACTS OF THE CASE. 6. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WE LL AS CASE LAW CITED, WE HOLD AS FOLLOWS: 7. WE FIRST TAKE UP THE ISSUE AS TO WHETHER THE LD. CIT(A) HAS POWERS OF ENHANCEMENT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ADMITTED FACT IS THAT 6 THE UNITED PROVINCES SUGAR COMPANY LTD. OF THE HON'BLE JURISDICTIONAL HIGH COURT FOR THE REASON THAT, IT IS NOT THE JURISDICTIONAL TED THAT, T HE LD. CIT(A) HAS NO SUCH LIBERTY. EMPHASISED THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT SECTION 115JB OF THE ACT CANNOT BE APPLIED WHEN BOTH THE GTI & TI ARE NIL AND NOT TAXES ARE PAYABLE. HE ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT SECTION 251(1)(A) OF THE ACT, GIVES VAST POWERS TO THE LD. CIT(A) TO ENHANCE THE ASSESSMENT. HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE NDICATE (SUPRA), AND SUBMITTED THE POWERS OF THE LD. CIT(A) IS CO TERMINUS WITH THE POWERS OF THE INCOME TAX OFFICER (ITO) AND THERE IS NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL /S WHICH WAS NOT RA ISED OR CONSIDERED BY THE ITO. HE SUBMITTED THAT NO RESTRICTIONS WHATSOEVER, CAN BE PLACED ON THE POWERS OF THE LD. CIT(A) WHILE HEARING THE APPEAL AND THAT HE LD. CIT(A) HAS ALL THE POWERS THAT THE ORIGINAL AUTHORITY MAY HAVE IN INCOME IN THE CASE OF ANY ASSESSEE. HE RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT A CERTIFICATE GIVEN BY THE CHARTERED ACCOUNTANT IN WITH MAT PROVISIONS U/S 115JB OF THE ACT, IS NOT APPLICABLE TO THE S THE PROVISIONS OF SECTION 115JA AND THE PROVISIONS OF SECTION 115JB ARE DIFFERENT AND THE DECISIONS OR JUDGMENTS CITED U/S 115JA OF THE AC APPLIED IN THIS CASE. HE FURTHER RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT F THE HONBLE CALCUTTA HIGH COURT, CANNOT BE HELD AS A BINDING PRECEDENT FOR THE REASON THAT, IT WAS NOT A SPEAKING ORDER AND ONLY HELD THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW INVOLVED ON THE DECISION OF THE TRIBUNAL , IN THE CASE OF THE ASSESSEE - 03. HE SUBMITTED THAT THE LUCKNOW BENCH OF THE TRIBUNAL HAS HELD THAT THIS ORDER IS PER INCARIUM. HE EXTENSIVELY RELIED ON THE DECISION OF THE LUCKNOW BENCH OF THE ITAT IN THE CASE OF M/S. L.H. SUGAR FACTORY LTD. (SUPRA) TED THAT AS PER THE ORDER, SECTION 115JB IS APPLICABLE TO THE FACTS OF THE CASE. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES LL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - WE FIRST TAKE UP THE ISSUE AS TO WHETHER THE LD. CIT(A) HAS POWERS OF ENHANCEMENT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ADMITTED FACT IS THAT ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. OF THE HON'BLE JURISDICTIONAL HIGH COURT FOR THE REASON THAT, IT IS NOT THE JURISDICTIONAL SUCH LIBERTY. HE ONCE AGAIN EMPHASISED THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT SECTION 115JB OF THE ACT CANNOT BE APPLIED WHEN BOTH THE GTI & TI ARE NIL AND NOT TAXES ARE PAYABLE. HE ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT SECTION 251(1)(A) OF THE ACT, GIVES VAST POWERS TO THE LD. CIT(A) TO ENHANCE THE ASSESSMENT. HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE AND SUBMITTED THE POWERS OF THE LD. CIT(A) IS CO - TERMINUS WITH THE POWERS OF THE INCOME TAX OFFICER (ITO) AND THERE IS NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL THE ITO. HE SUBMITTED THAT NO RESTRICTIONS WHATSOEVER, CAN BE PLACED ON THE POWERS OF THE LD. CIT(A) WHILE HEARING THE APPEAL AND THAT HE LD. CIT(A) HAS ALL THE POWERS THAT THE ORIGINAL AUTHORITY MAY HAVE IN INCOME IN THE CASE OF ANY ASSESSEE. HE RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT A CERTIFICATE GIVEN BY THE CHARTERED ACCOUNTANT IN WITH MAT PROVISIONS U/S 115JB OF THE ACT, IS NOT APPLICABLE TO THE S THE PROVISIONS OF SECTION 115JA AND THE PROVISIONS OF SECTION CITED U/S 115JA OF THE AC T CANNOT BE APPLIED IN THIS CASE. HE FURTHER RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT F THE HONBLE CALCUTTA HIGH COURT, CANNOT BE HELD AS A BINDING PRECEDENT FOR THE REASON THAT, IT WAS NOT A SPEAKING ORDER AND ONLY HELD THAT THERE IS NO SUBSTANTIAL IN THE CASE OF THE ASSESSEE , FOR 03. HE SUBMITTED THAT THE LUCKNOW BENCH OF THE TRIBUNAL HE EXTENSIVELY RELIED ON THE DECISION OF THE M/S. L.H. SUGAR FACTORY LTD. (SUPRA) AND TED THAT AS PER THE ORDER, SECTION 115JB IS APPLICABLE TO THE FACTS OF THE CASE. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES WE FIRST TAKE UP THE ISSUE AS TO WHETHER THE LD. CIT(A) HAS POWERS OF ENHANCEMENT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ADMITTED FACT IS THAT THE ASSESSING OFFICER HAS NOT DEALT WITH THE ISSUE AS BE COMPUTED U/S 115JB OF THE ACT, IN THE FACTS OF THE CASE. THE POSSIBLE REASON MIGHT ME THAT IN THE EARLIER ASSESSMENT YEARS, NO SUCH COMPUTATION OF BOOK PROFITS U/S 115JB OF THE ACT, WAS MADE AND WHEN THE SAME WAS MAD LD. CIT(A) AS WELL AS THE ITAT HAD HELD IN FAVOUR OF THE ASSESSEE AND THE HONBLE JURISDICTIONAL HIGH COURT HAD UPHELD THIS DECISION OF THE ITAT. AFTER THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE OF SET OFF OF BR AND HAD DELETED THE ADHOC DISALLOWANCE MADE BY THE ASSESSING OFFICER, THE GROSS TOTAL INCOME OF THE ASSESSEE AS WELL AS THE TOTAL INCOME WAS NIL AND THERE WAS NO TAX PAYABLE. 7.1. THE POWERS OF ENHANCEMENT OF THE C 251. (1) IN DISPOSING OF AN APPEAL, THE POWERS (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ASSESSMENT 44 45 [(AA) IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT IN RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABATES UNDER OTHER INFORMATION PR RECORDED BY, THE SETTLEMENT COMMISSION, IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD, CONFIRM, REDUCE, ENHANCE OR ANNUL THE A (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALTY, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHER TO ENHANCE OR TO REDUCE THE PENALTY; (C) IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. (2) THE 46 [***] 47 [COMMISSIONER (APPEALS)] SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUS ENHANCEMENT OR REDUCTION. EXPLANATION. IN DISPOSING OF AN APPEAL, THE 50 ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE THE APPELLANT. 8. THE HONBLE SUPREME COURT IN THE CASE OF CHAMARIA (1967) 66 ITR 443 SECTION 251 OF THE INCOME INCOME-TAX ACT, 1922] - COMMISSIONER (APPEALS) - WHETHER POWER OF ENHANCEMENT OF AAC UNDER SECTION 31(3) OF 1922 ACT IS RESTRICTED TO SUBJECT MATTER OF ASSESSMENT OR SOURCE OF INCOME WHICH HAVE BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMP HELD, YES - WHETHER, THEREFORE, AAC HAD NO JURISDICTION UNDER SECTION 31(3) OF 1922 ACT, TO ASSESS A SOURCE OF INCOME WHICH HAD NOT BEEN PROCESSED BY ITO AND WHICH WAS NOT DISCLOSED EITHER IN R ETURN FILED BY ASSESSEE OR IN ASSESSMENT ORDER THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF ITR 445 (CAL) , HAS HELD AS FOLLOWS: 7 THE UNITED PROVINCES SUGAR COMPANY LTD. THE ASSESSING OFFICER HAS NOT DEALT WITH THE ISSUE AS TO WHETHER THE BOOK PROFITS HAVE TO BE COMPUTED U/S 115JB OF THE ACT, IN THE FACTS OF THE CASE. THE POSSIBLE REASON MIGHT ME THAT IN THE EARLIER ASSESSMENT YEARS, NO SUCH COMPUTATION OF BOOK PROFITS U/S 115JB OF THE ACT, WAS MADE AND WHEN THE SAME WAS MAD E IN THE ASSESSMENT YEAR 2005 LD. CIT(A) AS WELL AS THE ITAT HAD HELD IN FAVOUR OF THE ASSESSEE AND THE HONBLE JURISDICTIONAL HIGH COURT HAD UPHELD THIS DECISION OF THE ITAT. AFTER THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE OF SET OFF OF BR OUGHT FORWARD OF UNABSORBED DEPRECIATION AND HAD DELETED THE ADHOC DISALLOWANCE MADE BY THE ASSESSING OFFICER, THE GROSS TOTAL INCOME OF THE ASSESSEE AS WELL AS THE TOTAL INCOME WAS NIL AND THERE WAS NO TAX PAYABLE. THE POWERS OF ENHANCEMENT OF THE C IT(A) ARE DISCUSSED AS FOLLOWS: (1) IN DISPOSING OF AN APPEAL, THE 38 [***] 39 [COMMISSIONER (APPEALS)] SHALL HAVE THE FOLLOWING IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR 44 [***]; IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT IN RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABATES UNDER SECTION 245HA , HE MAY, AFTER TAKING INTO CONSIDERATION ALL THE MATERIAL AND OTHER INFORMATION PR ODUCED BY THE ASSESSEE BEFORE, OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDED BY, THE SETTLEMENT COMMISSION, IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD, CONFIRM, REDUCE, ENHANCE OR ANNUL THE A IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALTY, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHER TO ENHANCE OR TO REDUCE THE PENALTY; IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. [COMMISSIONER (APPEALS)] SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUS IN DISPOSING OF AN APPEAL, THE 48 [***] 49 [COMMISSIONER (APPEALS)] MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE THE 48 [***] 49 [COMMISSIONER (APPEALS)] BY T THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RAI BAHADUR HARDUTROY MOTILAL 66 ITR 443 (SC) , HAS HELD AS UNDER:- SECTION 251 OF THE INCOME - TAX ACT, 1961 [CORRESPONDING TO SECTION 31(3) OF THE INDIAN COMMISSIONER (APPEALS) - POWER OF - ASSESSMENT YEAR 1952 WHETHER POWER OF ENHANCEMENT OF AAC UNDER SECTION 31(3) OF 1922 ACT IS RESTRICTED TO SUBJECT MATTER OF ASSESSMENT OR SOURCE OF INCOME WHICH HAVE BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMP LICATION BY ITO FROM POINT OF VIEW OF TAXABILITY OF ASSESSEE WHETHER, THEREFORE, AAC HAD NO JURISDICTION UNDER SECTION 31(3) OF 1922 ACT, TO ASSESS A SOURCE OF INCOME WHICH HAD NOT BEEN PROCESSED BY ITO AND WHICH WAS NOT ETURN FILED BY ASSESSEE OR IN ASSESSMENT ORDER - HELD, YES THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. NATIONAL CO. LTD. (1993) , HAS HELD AS FOLLOWS: - ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. TO WHETHER THE BOOK PROFITS HAVE TO BE COMPUTED U/S 115JB OF THE ACT, IN THE FACTS OF THE CASE. THE POSSIBLE REASON MIGHT ME THAT IN THE EARLIER ASSESSMENT YEARS, NO SUCH COMPUTATION OF BOOK PROFITS U/S 115JB OF E IN THE ASSESSMENT YEAR 2005 -06, THE LD. CIT(A) AS WELL AS THE ITAT HAD HELD IN FAVOUR OF THE ASSESSEE AND THE HONBLE JURISDICTIONAL HIGH COURT HAD UPHELD THIS DECISION OF THE ITAT. AFTER THE LD. CIT(A) HAS OUGHT FORWARD OF UNABSORBED DEPRECIATION AND HAD DELETED THE ADHOC DISALLOWANCE MADE BY THE ASSESSING OFFICER, THE GROSS TOTAL INCOME OF THE ASSESSEE AS WELL AS THE TOTAL INCOME WAS NIL AND THERE WAS NO TAX PAYABLE. IT(A) ARE DISCUSSED AS FOLLOWS: - [COMMISSIONER (APPEALS)] SHALL HAVE THE FOLLOWING IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR 43 ANNUL THE IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT IN RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT , HE MAY, AFTER TAKING INTO CONSIDERATION ALL THE MATERIAL AND ODUCED BY THE ASSESSEE BEFORE, OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDED BY, THE SETTLEMENT COMMISSION, IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD, CONFIRM, REDUCE, ENHANCE OR ANNUL THE A SSESSMENT;] IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALTY, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. [COMMISSIONER (APPEALS)] SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUS E AGAINST SUCH [COMMISSIONER (APPEALS)] MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, [COMMISSIONER (APPEALS)] BY T HE CIT VS. RAI BAHADUR HARDUTROY MOTILAL TAX ACT, 1961 [CORRESPONDING TO SECTION 31(3) OF THE INDIAN ASSESSMENT YEAR 1952 -53 WHETHER POWER OF ENHANCEMENT OF AAC UNDER SECTION 31(3) OF 1922 ACT IS RESTRICTED TO SUBJECT MATTER OF ASSESSMENT OR SOURCE OF INCOME WHICH HAVE BEEN CONSIDERED LICATION BY ITO FROM POINT OF VIEW OF TAXABILITY OF ASSESSEE - WHETHER, THEREFORE, AAC HAD NO JURISDICTION UNDER SECTION 31(3) OF 1922 ACT, TO ASSESS A SOURCE OF INCOME WHICH HAD NOT BEEN PROCESSED BY ITO AND WHICH WAS NOT HELD, YES CIT VS. NATIONAL CO. LTD. (1993) 199 IN CIT V. SHAPOORJI PALLONJI MISTRY ENHANCING THE ASSESSMENT FOR ANY YEAR, THE AAC CANNOT TRAVEL OUTSIDE THE RECORD, THAT IS TO SAY, THE RETURN MADE BY THE ASSESSEE AND THE ASSESSMENT ORDER PASSED BY THE ITO WITH A VIEW TO FINDING OUT NEW SOURCES OF INCOME NOT DISCLOSED IN EITHER. THE SUPREME COURT ALSO OBSERVED THAT THERE ARE OTHER PROVISIONS WHICH ENABLE ESCAPED INCOME FROM NEW SOURCES TO BE BROUGHT TO TAX AFTER FOLLOWING THE SPECIAL PROCEDURE. THE POWERS OF THE AAC EXTENDS TO MATTERS CON SIDERED BY THE ITO AND IF A NEW SOURCE IS TO BE CONSIDERED THEN THE POWER OF REMAND SHOULD BE EXERCISED. BY THE EXERCISE OF THE POWER TO ASSESS FRESH SOURCES OF INCOME, THE ASSESSEE IS DEPRIVED OF THE FINDING BY TWO TRIBUNALS AND ONE RIGHT OF APPEAL. IN TH E INSTANT CASE, THE ASSESSMENT IN QUESTION WAS MADE BY THE ITO LONG BEFORE THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 1962 PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE AFORESAID CASE, THE AAC HAD NO JURISDICTI ON TO ASSESS THE SAID SUM AND ENHANCE THE ASSESSMENT FOR THE ASSESSMENT YEAR 1963- 64 TAKING AN INCOME WHICH WAS NOT CONSIDERED BY THE ITO AT ALL. THE HONBLE DELHI HIGH COURT IN THE CASE OF ITR 556 [DELHI], HELD AS FOLL OWS: THE FIRST APPELLATE AUTHORITY IS INVESTED WITH VERY WIDE POWERS UNDER SECTION 251(1)( A ) AND ONCE AN ASSESSMENT ORDER IS BROUGHT BEFORE THE AUTHORITY, HIS COMPETENCE IS NOT RESTRICTED TO EXAMINING ONLY THOSE ASPECTS OF THE ASSESSMENT ABOUT WHICH THE ASSESSEE MAKES A GRIEVANCE AND RANGES OVER THE WHOLE ASSESSMENT TO CORRECT THE ASSESSING OFFI ASSESSEE IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF ASSESSMENT. HOWEVER, THERE IS A SOLITARY BUT SIGNIFICANT LIMIT THAT IT IS NOT OPEN TO THE COMMISSIONER TO INTRODUCE IN THE ASSESSMENT A NEW SOURCE OF INCOME AND THE ASSESSMENT HAS TO BE CONFINED TO THOSE ITEMS OF INCOME WHICH WERE THE SUBJECT- MATTER OF ORIGINAL ASSESSMENT. THE HO NBLE SUPREME COURT IN THE CASE OF ITR 225 ( SC ), HELD AS FOLLOWS: IT WAS, THEREFORE, HELD THAT SECTION 3 OF 1922 ACT IMPLIEDLY GIVES AN OPTION TO AN APPROPRIATE AUTHORITY TO ASSESS THE TOTAL INCOME OF EITHER THE ASS OR THE MEMBERS OF SUCH ASSOCIATION INDIVIDUALLY. THE NEXT QUESTION IS WHETHER THE SAID OPTION WAS GIVEN ONLY TO THE ITO AND IS DENIED TO THE AAC AND THE TRIBUNAL. UNDER THE ACT THE ITO, AFTER FOLLOWING THE PROCEDURE PRESCRIBED, MAKES TH ASSESSMENT UNDER SECTION 23 OF 1922 ACT. DOUBTLESS IN MAKING THE ASSESSMENT AT THE FIRST INSTANCE HE HAS TO EXERCISE THE OPTION WHETHER HE SHOULD ASSESS THE ASSOCIATION OF PERSONS OR THE MEMBERS THEREOF INDIVIDUALLY. IT IS NOT BECAUSE THAT ANY SECTION OF THE ACT CONFERS AN EXCLUSIVE POWER ON HIM TO DO SO, BUT BECAUSE IT IS PART OF THE PROCESS OF ASSESSMENT; THAT IS TO SAY, HE HAS TO ASCERTAIN WHO IS THE PERSON LIABLE TO BE ASSESSED FOR THE TAX. IF HE SEEKS TO ASSESS AN ASSOCIATION OF PERSONS AS AN ASSESSA BLE ENTITY, THE SAID ENTITY CAN OBJECT TO THE ASSESSMENT, GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT SHOULD BE MADE ON THE MEMBERS OF THE ASSOCIATION INDIVIDUALLY. THE ITO MAY REJECT ITS CONTENTION AND MAY ASSESS THE TOTAL INCOME OF THE ASSOCIATION AS SUCH AND IMPOSE THE TAX ON IT. UNDER SECTION 30 OF 1922 ACT AN ASSESSEE OBJECTING TO THE AMOUNT OF INCOME ASSESSED UNDER SECTION 23 OF 1922 ACT OR THE AMOUNT OF TAX DETERMINED UNDER THE SAID SECTION OR DENYING HIS LIABILITY TO BE ASSESSED UNDER THE ACT CAN PREFER AN APPEAL AGAINST THE ORDER O F THE ITO TO THE AAC. IT IS SAID THAT AN ORDER MADE BY THE ITO REJECTING THE PLEA OF AN ASSOCIATION OF PERSONS THAT THE MEMBERS THEREOF SHALL BE 8 THE UNITED PROVINCES SUGAR COMPANY LTD. IN CIT V. SHAPOORJI PALLONJI MISTRY [1962] 44 ITR 891 , THE SUPREME COURT HELD THAT IN ENHANCING THE ASSESSMENT FOR ANY YEAR, THE AAC CANNOT TRAVEL OUTSIDE THE RECORD, THAT IS TO SAY, THE RETURN MADE BY THE ASSESSEE AND THE ASSESSMENT ORDER PASSED BY THE ITO WITH A SOURCES OF INCOME NOT DISCLOSED IN EITHER. THE SUPREME COURT ALSO OBSERVED THAT THERE ARE OTHER PROVISIONS WHICH ENABLE ESCAPED INCOME FROM NEW SOURCES TO BE BROUGHT TO TAX AFTER FOLLOWING THE SPECIAL PROCEDURE. THE POWERS OF THE AAC EXTENDS SIDERED BY THE ITO AND IF A NEW SOURCE IS TO BE CONSIDERED THEN THE POWER OF REMAND SHOULD BE EXERCISED. BY THE EXERCISE OF THE POWER TO ASSESS FRESH SOURCES OF INCOME, THE ASSESSEE IS DEPRIVED OF THE FINDING BY TWO TRIBUNALS AND ONE RIGHT OF APPEAL. E INSTANT CASE, THE ASSESSMENT IN QUESTION WAS MADE BY THE ITO LONG BEFORE THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 1962 - 63, WAS PASSED. THEREFORE, IN VIEW OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE AFORESAID CASE, THE AAC HAD NO ON TO ASSESS THE SAID SUM AND ENHANCE THE ASSESSMENT FOR THE ASSESSMENT YEAR 64 TAKING AN INCOME WHICH WAS NOT CONSIDERED BY THE ITO AT ALL. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. UNION TYRES REPORTED IN 240 OWS: - THE FIRST APPELLATE AUTHORITY IS INVESTED WITH VERY WIDE POWERS UNDER SECTION ) AND ONCE AN ASSESSMENT ORDER IS BROUGHT BEFORE THE AUTHORITY, HIS COMPETENCE IS NOT RESTRICTED TO EXAMINING ONLY THOSE ASPECTS OF THE ASSESSMENT ABOUT WHICH THE ASSESSEE MAKES A GRIEVANCE AND RANGES OVER THE WHOLE ASSESSMENT TO CORRECT THE ASSESSING OFFI CER NOT ONLY WITH REGARD TO A MATTER RAISED BY THE ASSESSEE IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF ASSESSMENT. HOWEVER, THERE IS A SOLITARY BUT SIGNIFICANT LIMIT ATION TO THE POWER OF REVISION, THAT IT IS NOT OPEN TO THE COMMISSIONER TO INTRODUCE IN THE ASSESSMENT A NEW SOURCE OF INCOME AND THE ASSESSMENT HAS TO BE CONFINED TO THOSE ITEMS OF INCOME WHICH MATTER OF ORIGINAL ASSESSMENT. NBLE SUPREME COURT IN THE CASE OF CIT V. KANPUR COAL SYNDICATE (1964) HELD AS FOLLOWS: - IT WAS, THEREFORE, HELD THAT SECTION 3 OF 1922 ACT IMPLIEDLY GIVES AN OPTION TO AN APPROPRIATE AUTHORITY TO ASSESS THE TOTAL INCOME OF EITHER THE ASS OCIATION OF PERSONS OR THE MEMBERS OF SUCH ASSOCIATION INDIVIDUALLY. THE NEXT QUESTION IS WHETHER THE SAID OPTION WAS GIVEN ONLY TO THE ITO AND IS DENIED TO THE AAC AND THE TRIBUNAL. UNDER THE ACT THE ITO, AFTER FOLLOWING THE PROCEDURE PRESCRIBED, MAKES TH ASSESSMENT UNDER SECTION 23 OF 1922 ACT. DOUBTLESS IN MAKING THE ASSESSMENT AT THE FIRST INSTANCE HE HAS TO EXERCISE THE OPTION WHETHER HE SHOULD ASSESS THE ASSOCIATION OF PERSONS OR THE MEMBERS THEREOF INDIVIDUALLY. IT IS NOT BECAUSE THAT ANY SECTION OF THE ACT CONFERS AN EXCLUSIVE POWER ON HIM TO DO SO, BUT BECAUSE IT IS PART OF THE PROCESS OF ASSESSMENT; THAT IS TO SAY, HE HAS TO ASCERTAIN WHO IS THE PERSON LIABLE TO BE ASSESSED FOR THE TAX. IF HE SEEKS TO ASSESS AN ASSOCIATION OF PERSONS AS AN BLE ENTITY, THE SAID ENTITY CAN OBJECT TO THE ASSESSMENT, INTER ALIA, GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT SHOULD BE MADE ON THE MEMBERS OF THE ASSOCIATION INDIVIDUALLY. THE ITO MAY REJECT ITS CONTENTION AND MAY ASSESS THE TOTAL INCOME OF THE ASSOCIATION AS SUCH AND IMPOSE THE TAX ON IT. UNDER SECTION 30 OF 1922 ACT AN ASSESSEE OBJECTING TO THE AMOUNT OF INCOME ASSESSED UNDER SECTION 23 OF 1922 ACT OR THE AMOUNT OF TAX DETERMINED UNDER THE SAID SECTION OR DENYING HIS LIABILITY TO BE ASSESSED UNDER THE ACT CAN PREFER AN APPEAL F THE ITO TO THE AAC. IT IS SAID THAT AN ORDER MADE BY THE ITO REJECTING THE PLEA OF AN ASSOCIATION OF PERSONS THAT THE MEMBERS THEREOF SHALL BE ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. , THE SUPREME COURT HELD THAT IN ENHANCING THE ASSESSMENT FOR ANY YEAR, THE AAC CANNOT TRAVEL OUTSIDE THE RECORD, THAT IS TO SAY, THE RETURN MADE BY THE ASSESSEE AND THE ASSESSMENT ORDER PASSED BY THE ITO WITH A SOURCES OF INCOME NOT DISCLOSED IN EITHER. THE SUPREME COURT ALSO OBSERVED THAT THERE ARE OTHER PROVISIONS WHICH ENABLE ESCAPED INCOME FROM NEW SOURCES TO BE BROUGHT TO TAX AFTER FOLLOWING THE SPECIAL PROCEDURE. THE POWERS OF THE AAC EXTENDS SIDERED BY THE ITO AND IF A NEW SOURCE IS TO BE CONSIDERED THEN THE POWER OF REMAND SHOULD BE EXERCISED. BY THE EXERCISE OF THE POWER TO ASSESS FRESH SOURCES OF INCOME, THE ASSESSEE IS DEPRIVED OF THE FINDING BY TWO TRIBUNALS AND ONE RIGHT OF APPEAL. E INSTANT CASE, THE ASSESSMENT IN QUESTION WAS MADE BY THE ITO LONG BEFORE THE 63, WAS PASSED. THEREFORE, IN VIEW OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE AFORESAID CASE, THE AAC HAD NO ON TO ASSESS THE SAID SUM AND ENHANCE THE ASSESSMENT FOR THE ASSESSMENT YEAR CIT VS. UNION TYRES REPORTED IN 240 THE FIRST APPELLATE AUTHORITY IS INVESTED WITH VERY WIDE POWERS UNDER SECTION ) AND ONCE AN ASSESSMENT ORDER IS BROUGHT BEFORE THE AUTHORITY, HIS COMPETENCE IS NOT RESTRICTED TO EXAMINING ONLY THOSE ASPECTS OF THE ASSESSMENT ABOUT WHICH THE ASSESSEE MAKES A GRIEVANCE AND RANGES OVER THE WHOLE ASSESSMENT CER NOT ONLY WITH REGARD TO A MATTER RAISED BY THE ASSESSEE IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF ASSESSMENT. ATION TO THE POWER OF REVISION, VIZ. , THAT IT IS NOT OPEN TO THE COMMISSIONER TO INTRODUCE IN THE ASSESSMENT A NEW SOURCE OF INCOME AND THE ASSESSMENT HAS TO BE CONFINED TO THOSE ITEMS OF INCOME WHICH CIT V. KANPUR COAL SYNDICATE (1964) 53 IT WAS, THEREFORE, HELD THAT SECTION 3 OF 1922 ACT IMPLIEDLY GIVES AN OPTION TO AN OCIATION OF PERSONS OR THE MEMBERS OF SUCH ASSOCIATION INDIVIDUALLY. THE NEXT QUESTION IS WHETHER THE SAID OPTION WAS GIVEN ONLY TO THE ITO AND IS DENIED TO THE AAC AND THE TRIBUNAL. UNDER THE ACT THE ITO, AFTER FOLLOWING THE PROCEDURE PRESCRIBED, MAKES TH E ASSESSMENT UNDER SECTION 23 OF 1922 ACT. DOUBTLESS IN MAKING THE ASSESSMENT AT THE FIRST INSTANCE HE HAS TO EXERCISE THE OPTION WHETHER HE SHOULD ASSESS THE ASSOCIATION OF PERSONS OR THE MEMBERS THEREOF INDIVIDUALLY. IT IS NOT BECAUSE THAT ANY SECTION OF THE ACT CONFERS AN EXCLUSIVE POWER ON HIM TO DO SO, BUT BECAUSE IT IS PART OF THE PROCESS OF ASSESSMENT; THAT IS TO SAY, HE HAS TO ASCERTAIN WHO IS THE PERSON LIABLE TO BE ASSESSED FOR THE TAX. IF HE SEEKS TO ASSESS AN ASSOCIATION OF PERSONS AS AN INTER ALIA, ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT SHOULD BE MADE ON THE MEMBERS OF THE ASSOCIATION INDIVIDUALLY. THE ITO MAY REJECT ITS CONTENTION AND MAY ASSESS THE TOTAL INCOME OF THE ASSOCIATION AS SUCH AND IMPOSE THE TAX ON IT. UNDER SECTION 30 OF 1922 ACT AN ASSESSEE OBJECTING TO THE AMOUNT OF INCOME ASSESSED UNDER SECTION 23 OF 1922 ACT OR THE AMOUNT OF TAX DETERMINED UNDER THE SAID SECTION OR DENYING HIS LIABILITY TO BE ASSESSED UNDER THE ACT CAN PREFER AN APPEAL F THE ITO TO THE AAC. IT IS SAID THAT AN ORDER MADE BY THE ITO REJECTING THE PLEA OF AN ASSOCIATION OF PERSONS THAT THE MEMBERS THEREOF SHALL BE ASSESSED INDIVIDUALLY DOES NOT FALL UNDER ONE OR OTHER OF THE THREE HEADS MENTIONED ABOVE. WHAT IS THE SUBSTANC E OF THE OBJECTION OF THE ASSESSEE ? THE ASSESSEE DENIED HIS LIABILITY TO BE ASSESSED UNDER THE ACT IN THE CIRCUMSTANCES OF THE CASE AND PLEADED THAT THE MEMBERS OF THE ASSOCIATION WOULD BE ASSESSED ONLY INDIVIDUALLY. THE EXPRESSION 'DENIAL OF LIABILITY' I COMPREHENSIVE ENOUGH TO TAKE IN NOT ONLY THE TOTAL DENIAL OF LIABILITY BUT ALSO THE LIABILITY TO TAX UNDER PARTICULAR CIRCUMSTANCES. IN EITHER CASE THE DENIAL IS A DENIAL OF LIABILITY TO BE ASSESSED UNDER THE PROVISIONS OF THE ACT. IN ONE CASE THE ASSESS BE ASSESSED TO TAX UNDER THE ACT, AND IN THE OTHER CASE THE ASSESSEE DENIES HIS LIABILITY TO TAX UNDER THE PROVISIONS OF THE ACT IF THE OPTION GIVEN TO THE APPROPRIATE OFFICER UNDER THE PROVISIONS OF THE ACT IS JUDICIALLY E RIGHT OF APPEAL UNDER SECTION 30 OF 1922 ACT AGAINST THE ORDER OF THE ITO ASSESSING THE ASSOCIATION OF MEMBERS INSTEAD OF THE MEMBERS THEREOF INDIVIDUALLY. IF AN APPEAL LIES, SECTION 31 OF 1922 ACT DESCRIBES THE POWERS OF THE AAC IN SUCH AN APPEAL. THE AAC HAS, THEREFORE, PLENARY POWERS IN DISPOSING OF AN APPEAL. THE SCOPE OF HIS POWER IS CONTERMINOUS WITH THAT OF THE ITO. HE CAN DO WHAT THE ITO CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. IF THE ITO HAS THE OPTION TO ASSESS ONE OR OTHER OF THE ENTITIES IN THE ALTERNATIVE, THE AAC CAN DIRECT HIM TO DO WHAT HE SHOULD HAVE DONE IN THE CIRCUMSTANCES OF A CASE. UNDER SECTION 33(1), AN ASSESSEE OBJECTING TO AN ORDER PASSED BY AN AAC UNDER SECTION 31 MAY APPEAL TO THE TRIBUNAL WITHIN 60 DAYS OF THE DATE ON WHICH SUCH ORDER IS COMMUNICATED TO HIM. UNDER SECTION 33 OF 1922 ACT THE TRIBUNAL HAS AMPLE POWER TO SET ASIDE THE ASSESSMENT MADE ON THE ASSOCIATION OF PERSONS AND DIRECT INDIVIDUALS OR TO DIRECT THE AMENDMENT OF THE ASSESSMENT ALREADY MADE ON THE MEMBERS. THE COMPREHENSIVE PHRASEOLOGY USED BOTH IN SECTION 31 AND SECTION 33 OF THE 1922 ACT DOES NOT COUNTENANCE THE ATTEMPT OF THE REVENUE TO RESTRICT THE APPELLATE TRIBUNAL: BOTH OF THEM HAVE POWER TO DIRECT THE APPROPRIATE AUTHORITY TO ASSESS THE MEMBERS INDIVIDUALLY INSTEAD OF THE ASSOCIATION OF PERSONS AS A UNIT. IT WAS, THEREFORE, HELD AGREEING WITH THE HIGH COURT, THAT THE GIVE DIRECTIONS TO THE APPROPRIATE AUTHORITY TO CANCEL THE ASSESSMENT MADE ON THE ASSOCIATION OF PERSONS AND TO GIVE APPROPRIATE DIRECTIONS TO THE AUTHORITY CONCERNED TO MAKE A FRESH ASSESSMENT ON THE MEMBERS OF THAT ASSOCIATIO INSTANT APPEAL WAS TO BE DISMISSED. THIS JUDGMENT WAS CONSIDERED IN SUBSEQUENT JUDGMENTS BY VARIOUS COURTS AND THE LATER JUDGMENTS HOLD THE FIELD ON THIS ISSUE. THE HONBLE SUPREME COURT IN THE CASE OF [1997] 224 ITR 610 (SC), HELD AS FOLLOWS: FOR THE ASSESSMENT YEAR 1956 ADDITION TO THE ASSESSEE'S INCOME TO THE EXTENT OF RS. 2,45,000 ON ACCOUNT OF OSTENSIBLE TRANSACTIONS IN HUNDI WHILE SUSTAINING THE AFORESAID ADDITION ALSO TOOK NOTICE OF 10 OTHER ITEMS OF OSTENSIBLE HUNDI LOANS AMOUNTING TO RS. 2,30,000 AND DIRECTED THAT THE TOTAL INCOME BE ENHANCED BY THE SUM OF RS. 2,30,000. THE ADDITION HOLDING THAT THE AAO HAD EXCEEDED HIS JURISDICTION. THE HIGH COURT PLACING RELIANCE ON THE DECISION OF THE SUPREME COURT IN ADDL. CIT V. GURJARGRAVURES (P.) LTD. [1978] 111 ITR 1 HELD THAT THE AAC HAD NO JURISDICTION TO CONSIDER THE NEW ENTRIES WHICH WERE NOT CONSIDERED AT ALL BY THE ITO AND TO ADD THE AMOUNT OF RS. 2,30,000 TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO THE HIGH COURT, THE ITEMS REPRESENTING THE SAID AMOUNT C ONSTITUTED NEW SOURCES OF INCOME WHICH WERE NOT THE SUBJECT MATTER OF ASSESSMENT BEFORE THE ASSESSING OFFICER AND, THEREFORE, IT WAS NOT OPEN TO THE AAC IN APPEAL TO CONSIDER THE NEW SOURCES AND TO ASSESS THEM. 9 THE UNITED PROVINCES SUGAR COMPANY LTD. ASSESSED INDIVIDUALLY DOES NOT FALL UNDER ONE OR OTHER OF THE THREE HEADS MENTIONED ABOVE. E OF THE OBJECTION OF THE ASSESSEE ? THE ASSESSEE DENIED HIS LIABILITY TO BE ASSESSED UNDER THE ACT IN THE CIRCUMSTANCES OF THE CASE AND PLEADED THAT THE MEMBERS OF THE ASSOCIATION WOULD BE ASSESSED ONLY INDIVIDUALLY. THE EXPRESSION 'DENIAL OF LIABILITY' I COMPREHENSIVE ENOUGH TO TAKE IN NOT ONLY THE TOTAL DENIAL OF LIABILITY BUT ALSO THE LIABILITY TO TAX UNDER PARTICULAR CIRCUMSTANCES. IN EITHER CASE THE DENIAL IS A DENIAL OF LIABILITY TO BE ASSESSED UNDER THE PROVISIONS OF THE ACT. IN ONE CASE THE ASSESS EE SAYS THAT HE IS NOT LIABLE TO BE ASSESSED TO TAX UNDER THE ACT, AND IN THE OTHER CASE THE ASSESSEE DENIES HIS LIABILITY TO TAX UNDER THE PROVISIONS OF THE ACT IF THE OPTION GIVEN TO THE APPROPRIATE OFFICER UNDER THE PROVISIONS OF THE ACT IS JUDICIALLY E XERCISED. IT WAS, THEREFORE, HELD THAT SUCH AN ASSESSEE HAS A RIGHT OF APPEAL UNDER SECTION 30 OF 1922 ACT AGAINST THE ORDER OF THE ITO ASSESSING THE ASSOCIATION OF MEMBERS INSTEAD OF THE MEMBERS THEREOF INDIVIDUALLY. IF AN APPEAL LIES, ACT DESCRIBES THE POWERS OF THE AAC IN SUCH AN APPEAL. THE AAC HAS, THEREFORE, PLENARY POWERS IN DISPOSING OF AN APPEAL. THE SCOPE OF HIS POWER IS CONTERMINOUS WITH THAT OF THE ITO. HE CAN DO WHAT THE ITO CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS TO DO. IF THE ITO HAS THE OPTION TO ASSESS ONE OR OTHER OF THE ENTITIES IN THE ALTERNATIVE, THE AAC CAN DIRECT HIM TO DO WHAT HE SHOULD HAVE DONE IN THE CIRCUMSTANCES OF A CASE. UNDER SECTION 33(1), AN ASSESSEE OBJECTING TO AN ORDER PASSED BY AN AAC UNDER SECTION 31 MAY APPEAL TO THE TRIBUNAL WITHIN 60 DAYS OF THE DATE ON WHICH SUCH ORDER IS COMMUNICATED TO HIM. UNDER SECTION 33 OF 1922 ACT THE TRIBUNAL HAS AMPLE POWER TO SET ASIDE THE ASSESSMENT MADE ON THE ASSOCIATION OF PERSONS AND DIRECT THE ITO TO ASSESS THE INDIVIDUALS OR TO DIRECT THE AMENDMENT OF THE ASSESSMENT ALREADY MADE ON THE MEMBERS. THE COMPREHENSIVE PHRASEOLOGY USED BOTH IN SECTION 31 AND SECTION 33 OF THE 1922 ACT DOES NOT COUNTENANCE THE ATTEMPT OF THE REVENUE TO RESTRICT THE POWERS OF THE AAC OR OF THE APPELLATE TRIBUNAL: BOTH OF THEM HAVE POWER TO DIRECT THE APPROPRIATE AUTHORITY TO ASSESS THE MEMBERS INDIVIDUALLY INSTEAD OF THE ASSOCIATION OF PERSONS AS A UNIT. IT WAS, THEREFORE, HELD AGREEING WITH THE HIGH COURT, THAT THE TRIBUNAL HAS JURISDICTION TO GIVE DIRECTIONS TO THE APPROPRIATE AUTHORITY TO CANCEL THE ASSESSMENT MADE ON THE ASSOCIATION OF PERSONS AND TO GIVE APPROPRIATE DIRECTIONS TO THE AUTHORITY CONCERNED TO MAKE A FRESH ASSESSMENT ON THE MEMBERS OF THAT ASSOCIATIO N INDIVIDUALLY. IN THE RESULT, THE INSTANT APPEAL WAS TO BE DISMISSED. THIS JUDGMENT WAS CONSIDERED IN SUBSEQUENT JUDGMENTS BY VARIOUS COURTS AND THE LATER JUDGMENTS HOLD THE FIELD ON THIS ISSUE. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. NIRBHERAM DELURAM REPORTED IN HELD AS FOLLOWS: - FOR THE ASSESSMENT YEAR 1956 - 57, DURING REASSESSMENT PROCEEDINGS THE ITO MADE ADDITION TO THE ASSESSEE'S INCOME TO THE EXTENT OF RS. 2,45,000 ON ACCOUNT OF OSTENSIBLE TRANSACTIONS IN HUNDI LOANS SHOWN BY THE ASSESSEE. ON APPEAL, THE AAC, WHILE SUSTAINING THE AFORESAID ADDITION ALSO TOOK NOTICE OF 10 OTHER ITEMS OF OSTENSIBLE HUNDI LOANS AMOUNTING TO RS. 2,30,000 AND DIRECTED THAT THE TOTAL INCOME BE ENHANCED BY THE SUM OF RS. 2,30,000. THE TRIBUNAL, HOWEVER, DELETED THE SAID ADDITION HOLDING THAT THE AAO HAD EXCEEDED HIS JURISDICTION. THE HIGH COURT PLACING RELIANCE ON THE DECISION OF THE SUPREME COURT IN ADDL. CIT V. GURJARGRAVURES (P.) LTD. HELD THAT THE AAC HAD NO JURISDICTION TO CONSIDER THE NEW ENTRIES WHICH WERE NOT CONSIDERED AT ALL BY THE ITO AND TO ADD THE AMOUNT OF RS. 2,30,000 TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO THE HIGH COURT, THE ITEMS REPRESENTING ONSTITUTED NEW SOURCES OF INCOME WHICH WERE NOT THE SUBJECT MATTER OF ASSESSMENT BEFORE THE ASSESSING OFFICER AND, THEREFORE, IT WAS NOT OPEN TO THE AAC IN APPEAL TO CONSIDER THE NEW SOURCES AND TO ASSESS THEM. ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. ASSESSED INDIVIDUALLY DOES NOT FALL UNDER ONE OR OTHER OF THE THREE HEADS MENTIONED ABOVE. E OF THE OBJECTION OF THE ASSESSEE ? THE ASSESSEE DENIED HIS LIABILITY TO BE ASSESSED UNDER THE ACT IN THE CIRCUMSTANCES OF THE CASE AND PLEADED THAT THE MEMBERS OF THE ASSOCIATION WOULD BE ASSESSED ONLY INDIVIDUALLY. THE EXPRESSION 'DENIAL OF LIABILITY' I S COMPREHENSIVE ENOUGH TO TAKE IN NOT ONLY THE TOTAL DENIAL OF LIABILITY BUT ALSO THE LIABILITY TO TAX UNDER PARTICULAR CIRCUMSTANCES. IN EITHER CASE THE DENIAL IS A DENIAL OF LIABILITY TO BE EE SAYS THAT HE IS NOT LIABLE TO BE ASSESSED TO TAX UNDER THE ACT, AND IN THE OTHER CASE THE ASSESSEE DENIES HIS LIABILITY TO TAX UNDER THE PROVISIONS OF THE ACT IF THE OPTION GIVEN TO THE APPROPRIATE OFFICER UNDER THE XERCISED. IT WAS, THEREFORE, HELD THAT SUCH AN ASSESSEE HAS A RIGHT OF APPEAL UNDER SECTION 30 OF 1922 ACT AGAINST THE ORDER OF THE ITO ASSESSING THE ASSOCIATION OF MEMBERS INSTEAD OF THE MEMBERS THEREOF INDIVIDUALLY. IF AN APPEAL LIES, ACT DESCRIBES THE POWERS OF THE AAC IN SUCH AN APPEAL. THE AAC HAS, THEREFORE, PLENARY POWERS IN DISPOSING OF AN APPEAL. THE SCOPE OF HIS POWER IS CONTERMINOUS WITH THAT OF THE ITO. HE CAN DO WHAT THE ITO CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS TO DO. IF THE ITO HAS THE OPTION TO ASSESS ONE OR OTHER OF THE ENTITIES IN THE ALTERNATIVE, THE AAC CAN DIRECT HIM TO DO WHAT HE SHOULD HAVE DONE IN THE CIRCUMSTANCES OF A CASE. UNDER SECTION 33(1), AN ASSESSEE OBJECTING TO AN ORDER PASSED BY AN AAC UNDER SECTION 28 OR SECTION 31 MAY APPEAL TO THE TRIBUNAL WITHIN 60 DAYS OF THE DATE ON WHICH SUCH ORDER IS COMMUNICATED TO HIM. UNDER SECTION 33 OF 1922 ACT THE TRIBUNAL HAS AMPLE POWER TO SET THE ITO TO ASSESS THE INDIVIDUALS OR TO DIRECT THE AMENDMENT OF THE ASSESSMENT ALREADY MADE ON THE MEMBERS. THE COMPREHENSIVE PHRASEOLOGY USED BOTH IN SECTION 31 AND SECTION 33 OF THE 1922 ACT DOES POWERS OF THE AAC OR OF THE APPELLATE TRIBUNAL: BOTH OF THEM HAVE POWER TO DIRECT THE APPROPRIATE AUTHORITY TO ASSESS TRIBUNAL HAS JURISDICTION TO GIVE DIRECTIONS TO THE APPROPRIATE AUTHORITY TO CANCEL THE ASSESSMENT MADE ON THE ASSOCIATION OF PERSONS AND TO GIVE APPROPRIATE DIRECTIONS TO THE AUTHORITY CONCERNED TO N INDIVIDUALLY. IN THE RESULT, THE THIS JUDGMENT WAS CONSIDERED IN SUBSEQUENT JUDGMENTS BY VARIOUS COURTS AND DELURAM REPORTED IN 57, DURING REASSESSMENT PROCEEDINGS THE ITO MADE ADDITION TO THE ASSESSEE'S INCOME TO THE EXTENT OF RS. 2,45,000 ON ACCOUNT OF LOANS SHOWN BY THE ASSESSEE. ON APPEAL, THE AAC, WHILE SUSTAINING THE AFORESAID ADDITION ALSO TOOK NOTICE OF 10 OTHER ITEMS OF OSTENSIBLE HUNDI LOANS AMOUNTING TO RS. 2,30,000 AND DIRECTED THAT THE TOTAL INCOME TRIBUNAL, HOWEVER, DELETED THE SAID ADDITION HOLDING THAT THE AAO HAD EXCEEDED HIS JURISDICTION. THE HIGH COURT PLACING RELIANCE ON THE DECISION OF THE SUPREME COURT IN ADDL. CIT V. GURJARGRAVURES (P.) LTD. HELD THAT THE AAC HAD NO JURISDICTION TO CONSIDER THE NEW ENTRIES WHICH WERE NOT CONSIDERED AT ALL BY THE ITO AND TO ADD THE AMOUNT OF RS. 2,30,000 TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO THE HIGH COURT, THE ITEMS REPRESENTING ONSTITUTED NEW SOURCES OF INCOME WHICH WERE NOT THE SUBJECT - MATTER OF ASSESSMENT BEFORE THE ASSESSING OFFICER AND, THEREFORE, IT WAS NOT OPEN TO THE HONBLE DELHI HIGH COURT IN THE CASE OF [2001] 251 ITR 864 (DELHI) HELD AS FOLLOWS: SECTION 251 OF THE INCOME WHETHER WHENEVER QUESTION OF TAXABILITY OF INCOME FROM A NEW SOURCE OF INCOME IS CONCERNED WHICH HAD NOT BEEN CONSIDERED BY ASSESSING OFFICER, JURISDICTION TO DEAL WITH SAME IN APPROPRIATE 263 IF REQUISITE CONDITIONS ARE FULFILLED AND IT IS INCONCEIVABLE THAT IN PRESENCE OF SUCH SPECIFIC PROVISIONS A SIMILAR POWER IS AVAILABLE TO FIRST APPELLATE AUTHORITY THE HONBLE DE LHI HIGH COURT IN THE CASE OF CIT REPORTED IN 348 ITR 170 INCOME TAX ACT FOR BRINGING TO TAX, THE ADDITION INCOME AND HELD AS UNDER: 14. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. THERE IS NO DOUBT ABOUT THE FACT THAT WHILE FRAMING THE ASSESSMENT EVEN UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER MAY OMIT TO MAKE CERTAIN ADDITIONS OF INCOME OR OMIT TO DISALLOW CERTAIN NOT ADMISSIBLE UNDER THE PROVISIONS OF THE ACT THEREBY LEADING TO ESCAPEMENT OF INCOME. THE INCOME- TAX ACT PROVIDES FOR REMEDIAL MEASURES WHICH CAN BE TAKEN UNDER THESE CIRCUMSTANCES. WHILE FRAMING AN ASSESSMENT UNDER SECTION 143(3) OF TH FOLLOWING SITUATION MAY OCCUR: (A) THE ASSESSING OFFICER MAY ACCEPT THE RETURN OF INCOME WITHOUT MAKING ANY ADDITION OR DISALLOWANCE; OR (B) THE ASSESSMENT IS FRAMED AND THE ASSESSING OFFICER MAKES CERTAIN ADDITION OR DISALLOWANCE AND IN ITEMS OF INCOME IN THE BODY OF ORDER OF ASSESSMENT BUT HE UNDER (C) HE MAKES NO ADDITION IN RESPECT OF SOME OF THE ITEMS, THOUGH IN THE COURSE OF HEARING BEFORE HIM HOLDS A DISCUSSION OF SUCH ITEMS OF INCOME (D) YET, THERE CAN BE ANOTHER SITUATION WHERE THE ASSESSING OFFICER INADVERTENTLY OMITS TO TAX AN AMOUNT WHICH OUGHT TO HAVE BEEN TAXED AND IN RESPECT OF WHICH HE DOES NOT MAKE ANY ENQUIRY. (E) FURTHER ANOTHER SITUATION MAY ARISE, WHERE AN ITEM OR ITEMS OF INCOME OR EXPENDITURE, INCURRED AND CLAIMED IS NOT AT ALL CONSIDERED AND AN ASSESSMENT IS FRAMED, AS A RESULT THEREOF, A PREJUDICE IS CAUSED TO THE REVENUE, OR (F) WHERE AN ITEM OF INCOME WHICH OUGHT TO HAVE B IS AN ESCAPEMENT OF INCOME, AS A RESULT OF THE ASSESSEE'S FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPUTATION OF INCOME. TO ENSURE FOR EACH OF SUCH SITUATIONS, AN INCOME WHICH OUGHT TO HAVE REMAINED UNTAXED, THE LEGISLATURE HAS PROVIDED DIFFERENT REMEDIAL MEASURES AS ARE CONTAINED IN SECTIONS 251(1)(A), 263, 154 AND 147 OF THE ACT. IN THE CATEGORY STATED IN (A), OBVIOUSLY IF AN INCOME ESCAPES AN ASSESSMENT, THE PROVISIONS OF S ECTION 147 OF THE ACT CAN BE INVOKED, SUBJECT TO THE CONDITION STATED IN THE PROVISO OF THE SAID SECTION. IN THE CATEGORY OF CASES FALLING IN CATEGORY (B), SECTION 251(1)(A) PROVIDES THE CIT(A) 10 THE UNITED PROVINCES SUGAR COMPANY LTD. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SARDARI LAL CO. HELD AS FOLLOWS: - OF THE INCOME -TAX ACT, 1961 - COMMISSIONER (APPEALS) WHETHER WHENEVER QUESTION OF TAXABILITY OF INCOME FROM A NEW SOURCE OF INCOME IS CONCERNED WHICH HAD NOT BEEN CONSIDERED BY ASSESSING OFFICER, JURISDICTION TO DEAL WITH SAME IN APPROPRIATE CASES MAY BE DEALT WITH UNDER SECTION 147/148 AND SECTION 263 IF REQUISITE CONDITIONS ARE FULFILLED AND IT IS INCONCEIVABLE THAT IN PRESENCE OF SUCH SPECIFIC PROVISIONS A SIMILAR POWER IS AVAILABLE TO FIRST APPELLATE AUTHORITY LHI HIGH COURT IN THE CASE OF GURINDER MOHAN SINGH NIDRAJOG VS. CIT REPORTED IN 348 ITR 170 , CONSIDERED AT LENGTH THE VARIOUS REMEDIES UNDER THE INCOME TAX ACT FOR BRINGING TO TAX, THE ADDITION INCOME AND HELD AS UNDER: WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. THERE IS NO DOUBT ABOUT THE FACT THAT WHILE FRAMING THE ASSESSMENT EVEN UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER MAY OMIT TO MAKE CERTAIN ADDITIONS OF INCOME OR OMIT TO DISALLOW CERTAIN NOT ADMISSIBLE UNDER THE PROVISIONS OF THE ACT THEREBY LEADING TO ESCAPEMENT OF INCOME. THE TAX ACT PROVIDES FOR REMEDIAL MEASURES WHICH CAN BE TAKEN UNDER THESE CIRCUMSTANCES. WHILE FRAMING AN ASSESSMENT UNDER SECTION 143(3) OF TH FOLLOWING SITUATION MAY OCCUR: - (A) THE ASSESSING OFFICER MAY ACCEPT THE RETURN OF INCOME WITHOUT MAKING ANY ADDITION OR (B) THE ASSESSMENT IS FRAMED AND THE ASSESSING OFFICER MAKES CERTAIN ADDITION OR MAKING SUCH ADDITIONS OR DISALLOWANCES, HE DEALS WITH SUCH ITEM OR ITEMS OF INCOME IN THE BODY OF ORDER OF ASSESSMENT BUT HE UNDER - ASSESSED SUCH SUMS; OR (C) HE MAKES NO ADDITION IN RESPECT OF SOME OF THE ITEMS, THOUGH IN THE COURSE OF HEARING HOLDS A DISCUSSION OF SUCH ITEMS OF INCOME (D) YET, THERE CAN BE ANOTHER SITUATION WHERE THE ASSESSING OFFICER INADVERTENTLY OMITS TO TAX AN AMOUNT WHICH OUGHT TO HAVE BEEN TAXED AND IN RESPECT OF WHICH HE DOES NOT SITUATION MAY ARISE, WHERE AN ITEM OR ITEMS OF INCOME OR EXPENDITURE, INCURRED AND CLAIMED IS NOT AT ALL CONSIDERED AND AN ASSESSMENT IS FRAMED, AS A RESULT THEREOF, A PREJUDICE IS CAUSED TO THE REVENUE, OR (F) WHERE AN ITEM OF INCOME WHICH OUGHT TO HAVE B EEN TAXED REMAINED UNTAXED, AND THERE IS AN ESCAPEMENT OF INCOME, AS A RESULT OF THE ASSESSEE'S FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPUTATION OF INCOME. TO ENSURE FOR EACH OF SUCH SITUATIONS, AN INCOME WHICH OUGHT TO HAVE REMAINED UNTAXED, THE LEGISLATURE HAS PROVIDED DIFFERENT REMEDIAL MEASURES AS ARE CONTAINED IN SECTIONS 251(1)(A), 263, 154 AND 147 OF THE ACT. IN THE CATEGORY STATED IN (A), OBVIOUSLY IF AN INCOME ESCAPES AN ASSESSMENT, THE PROVISIONS OF ECTION 147 OF THE ACT CAN BE INVOKED, SUBJECT TO THE CONDITION STATED IN THE PROVISO OF THE SAID SECTION. IN THE CATEGORY OF CASES FALLING IN CATEGORY (B), SECTION 251(1)(A) PROVIDES THE CIT(A) ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. CIT VS. SARDARI LAL CO. REPORTED IN COMMISSIONER (APPEALS) - POWERS OF - WHETHER WHENEVER QUESTION OF TAXABILITY OF INCOME FROM A NEW SOURCE OF INCOME IS CONCERNED WHICH HAD NOT BEEN CONSIDERED BY ASSESSING OFFICER, JURISDICTION TO DEAL CASES MAY BE DEALT WITH UNDER SECTION 147/148 AND SECTION 263 IF REQUISITE CONDITIONS ARE FULFILLED AND IT IS INCONCEIVABLE THAT IN PRESENCE OF SUCH SPECIFIC PROVISIONS A SIMILAR POWER IS AVAILABLE TO FIRST APPELLATE AUTHORITY - HELD, YES GURINDER MOHAN SINGH NIDRAJOG VS. CONSIDERED AT LENGTH THE VARIOUS REMEDIES UNDER THE INCOME TAX ACT FOR BRINGING TO TAX, THE ADDITION INCOME AND HELD AS UNDER: - WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. THERE IS NO DOUBT ABOUT THE FACT THAT WHILE FRAMING THE ASSESSMENT EVEN UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER MAY OMIT TO MAKE CERTAIN ADDITIONS OF INCOME OR OMIT TO DISALLOW CERTAIN CLAIMS WHICH ARE NOT ADMISSIBLE UNDER THE PROVISIONS OF THE ACT THEREBY LEADING TO ESCAPEMENT OF INCOME. THE TAX ACT PROVIDES FOR REMEDIAL MEASURES WHICH CAN BE TAKEN UNDER THESE CIRCUMSTANCES. WHILE FRAMING AN ASSESSMENT UNDER SECTION 143(3) OF TH E ACT, ANY OF THE (A) THE ASSESSING OFFICER MAY ACCEPT THE RETURN OF INCOME WITHOUT MAKING ANY ADDITION OR (B) THE ASSESSMENT IS FRAMED AND THE ASSESSING OFFICER MAKES CERTAIN ADDITION OR MAKING SUCH ADDITIONS OR DISALLOWANCES, HE DEALS WITH SUCH ITEM OR ASSESSED SUCH SUMS; OR (C) HE MAKES NO ADDITION IN RESPECT OF SOME OF THE ITEMS, THOUGH IN THE COURSE OF HEARING (D) YET, THERE CAN BE ANOTHER SITUATION WHERE THE ASSESSING OFFICER INADVERTENTLY OMITS TO TAX AN AMOUNT WHICH OUGHT TO HAVE BEEN TAXED AND IN RESPECT OF WHICH HE DOES NOT SITUATION MAY ARISE, WHERE AN ITEM OR ITEMS OF INCOME OR EXPENDITURE, INCURRED AND CLAIMED IS NOT AT ALL CONSIDERED AND AN ASSESSMENT IS FRAMED, AS A RESULT EEN TAXED REMAINED UNTAXED, AND THERE IS AN ESCAPEMENT OF INCOME, AS A RESULT OF THE ASSESSEE'S FAILURE TO DISCLOSE FULLY AND TO ENSURE FOR EACH OF SUCH SITUATIONS, AN INCOME WHICH OUGHT TO HAVE BEEN TAXED AND REMAINED UNTAXED, THE LEGISLATURE HAS PROVIDED DIFFERENT REMEDIAL MEASURES AS ARE CONTAINED IN THE CATEGORY STATED IN (A), OBVIOUSLY IF AN INCOME ESCAPES AN ASSESSMENT, THE PROVISIONS OF ECTION 147 OF THE ACT CAN BE INVOKED, SUBJECT TO THE CONDITION STATED IN THE PROVISO OF THE SAID SECTION. IN THE CATEGORY OF CASES FALLING IN CATEGORY (B), SECTION 251(1)(A) PROVIDES THE CIT(A) COULD ENHANCE SUCH AN ASSESSMENT QUA THE UNDER THE ISSUE IN THE ASSESSMENT AND WAS THE SUBJECT MATTER OF APPEAL. IN CATEGORY FALLING IN (C) & (E), THE CIT HAS BEEN EMPOWERED TO TAKE AN APPROPRIATE ACTION UNDER SECTION 263 OF THE ACT IN CATEGORY OF CASES FALLING UNDER CLAUSE ACT CAN BE TAKEN TO TAX THE INCOME WHICH HAS ESCAPED ASSESSMENT OR HAD REMAINED TO BE TAXED. THERE CAN BE SITUATIONS WHERE AN ITEM HAS BEEN DEALT WITH IN THE BODY OF THE ORDER OF ASSESSMENT AND THE A SSESSEE BEING AGGRIEVED FROM THE ADDITION OR DISALLOWANCES SO MADE, HAD PREFERRED AN APPEAL BEFORE THE CIT(A) AGAINST THE SAID ADDITION AND DISALLOWANCE, THE SAID DISALLOWANCE AND ADDITION BEING THE SUBJECT MATTER OF APPEAL BEFORE THE CIT(A) IN SUCH CASES, THE CIT(A) HAS BEEN EMPOWERED U/S 251(1)(A) OF THE ACT, TO ENHANCE SUCH AN INCOME WHERE THE ASSESSING OFFICER HAD PROCEEDED TO MAKE ADDITION OR DISALLOWANCE BY DEALING WITH THE SAME IN THE BODY OF ORDER OF ASSESSMENT BY UNDER ASSESSING THE SAME AS THE SAM SUBJECT MATTER OF THE APPEAL AS PER THE GROUNDS OF THE APPEAL RAISED BEFORE HIM. IN OTHER WORDS, THE CIT(A) HAS A POWER OF ENHANCEMENT IN RESPECT OF SUCH ITEM OR ITEMS OF INCOME WHICH HAS BEEN DEALT WITH IN THE BODY OF THE ORDER OF THE ASSESSMENT CONSIDERATION AS PER THE GROUNDS OF APPEAL RAISED BEFORE HIM, BEING THE SUBJECT MATTER OF APPEAL. 15. THIS IS SUCCINCTLY STATED IN CIT V. EDWARD KEVENTER (SUCCESSORS) (P.) LTD. [1980] 200 (DELHI) :- 16. THE ONLY QUESTION IS AS TO WHETHER THE CIT(A), IN EXERCISE OF POWER UNDER SECTION 251(1)(A) OF THE ACT HAS THE POWER TO ENHANCE THE ASSESSMENT IN THE MANNER DONE IN THE INSTANT CASE. AS NOTED ABOVE, THE SUBMISSION OF LEARNED COUNSEL FOR THE APPELL ASSESSING OFFICER HAD NOT DEALT WITH THE ISSUE IN QUESTION (ON WHICH ADDITIONS ARE MADE) IN THE ASSESSMENT ORDER AT ALL AND THEREFORE, THE CIT(A) HAD NO POWER TO MAKE ANY ADDITIONS UNDER SECTION 251(1)(A) OF THE ACT. ACCORDING TO THE ASSES HAVE DISCUSSED SUCH AN ISSUE DURING THE COURSE OF HEARING BEFORE HIM, I.E. INCIDENTAL OR COLLATERAL EXAMINATION, THAT ITSELF WOULD NOT HAVE GIVEN POWER TO THE CIT(A) UNLESS THE ISSUE WAS SPECIFICALLY DEALT WITH BY T ASPECT WHICH NEEDS CONSIDERATION IN THE PRESENT CASE. 17. BEFORE ADVERTING TO THIS, WE MAY NOTE THAT, AS A FACT, THE ASSESSING OFFICER HAD ISSUED A QUESTIONNAIRE SPECIFICALLY ON THE AFORESAID TWO ADDITIONS BY ENHANCING THE INCOME OF THE ASSESSEE. THE ASSESSEE HAD EVEN REPLIED TO THE SAID QUESTIONNAIRE. IT IS ALSO TO BE KEPT IN MIND THAT IT IS A CASE OF SEARCH AND DURING THE SEARCH CERTAIN DOCUMENTS WER E SEIZED. THE ASSESSMENT OF THAT PERIOD HAS BEEN MADE ON THE BASIS OF THAT SEARCH. THE ASSESSING OFFICER UNDERTAKEN THE EXERCISE AS TO WHETHER THE INCOME IS TO BE BROUGHT TO TAX OR NOT ON THE BASIS OF VARIOUS DOCUMENTS SEIZED. BASED ON SEIZED DOCUMENTS QUE RIES WERE RAISED AND THE ASSESSEE HAD EVEN FURNISHED THE SPECIFIC REPLY THERETO BEFORE THE ASSESSING OFFICER. HOWEVER, IT IS ALSO A MATTER OF RECORD THAT IN THE FINAL ASSESSMENT ORDER PASSED, THERE IS NO MENTION ABOUT THE AFORESAID TWO ITEMS. ACCORDING TO CIT(A) HAD DISCOVERED A NEW SOURCE OF INCOME NOT CONSIDERED BY THE AO IN HIS ORDER AND, THEREFORE, THE CIT(A) HAD NO SUCH POWER UNDER SECTION 251(A) (A) OF THE ACT. THE CASE OF THE REVENUE, ON THE OTHER HAND IS THAT THE AO HAD ALREADY CONS HAD ASKED FOR THE EXPLANATION OF THE ASSESSEE AND FOUND THE EXPLANATION TO BE ACCEPTABLE BECAUSE OF WHICH THE AO DID NOT MENTION ANYTHING IN THE ASSESSMENT ORDER REGARDING THE TWO ITEMS. ON THE OTHER HAND, THE CIT(A) FOUND SO ASSESSEE AND IN THESE CIRCUMSTANCES, HE MADE THE ENHANCEMENT OF INCOME. IT WAS, THEREFORE, NOT A CASE OF THE DISCOVERY OF NEW SOURCE OF INCOME WHICH WAS NOT CONSIDERED BY THE ASSESSING 11 THE UNITED PROVINCES SUGAR COMPANY LTD. COULD ENHANCE SUCH AN ASSESSMENT QUA THE UNDER -ASSESSED SUM I.E. WHERE THE AO HAD DEALT THE ISSUE IN THE ASSESSMENT AND WAS THE SUBJECT MATTER OF APPEAL. IN CATEGORY FALLING IN (C) & (E), THE CIT HAS BEEN EMPOWERED TO TAKE AN APPROPRIATE ACTION UNDER SECTION 263 OF THE ACT IN CATEGORY OF CASES FALLING UNDER CLAUSE (D) AND (F), APPROPRIATE ACTION UNDER SECTION 147 OF THE ACT CAN BE TAKEN TO TAX THE INCOME WHICH HAS ESCAPED ASSESSMENT OR HAD REMAINED TO BE TAXED. THERE CAN BE SITUATIONS WHERE AN ITEM HAS BEEN DEALT WITH IN THE BODY OF THE ORDER OF SSESSEE BEING AGGRIEVED FROM THE ADDITION OR DISALLOWANCES SO MADE, HAD PREFERRED AN APPEAL BEFORE THE CIT(A) AGAINST THE SAID ADDITION AND DISALLOWANCE, THE SAID DISALLOWANCE AND ADDITION BEING THE SUBJECT MATTER OF APPEAL BEFORE THE CIT(A) IN SUCH CASES, THE CIT(A) HAS BEEN EMPOWERED U/S 251(1)(A) OF THE ACT, TO ENHANCE SUCH AN INCOME WHERE THE ASSESSING OFFICER HAD PROCEEDED TO MAKE ADDITION OR DISALLOWANCE BY DEALING WITH THE SAME IN THE BODY OF ORDER OF ASSESSMENT BY UNDER ASSESSING THE SAME AS THE SAM SUBJECT MATTER OF THE APPEAL AS PER THE GROUNDS OF THE APPEAL RAISED BEFORE HIM. IN OTHER WORDS, THE CIT(A) HAS A POWER OF ENHANCEMENT IN RESPECT OF SUCH ITEM OR ITEMS OF INCOME WHICH HAS BEEN DEALT WITH IN THE BODY OF THE ORDER OF THE ASSESSMENT CONSIDERATION AS PER THE GROUNDS OF APPEAL RAISED BEFORE HIM, BEING THE SUBJECT MATTER OF THIS IS SUCCINCTLY STATED IN CIT V. EDWARD KEVENTER (SUCCESSORS) (P.) LTD. [1980] THE ONLY QUESTION IS AS TO WHETHER THE CIT(A), IN EXERCISE OF POWER UNDER SECTION 251(1)(A) OF THE ACT HAS THE POWER TO ENHANCE THE ASSESSMENT IN THE MANNER DONE IN THE INSTANT CASE. AS NOTED ABOVE, THE SUBMISSION OF LEARNED COUNSEL FOR THE APPELL ASSESSING OFFICER HAD NOT DEALT WITH THE ISSUE IN QUESTION (ON WHICH ADDITIONS ARE MADE) IN THE ASSESSMENT ORDER AT ALL AND THEREFORE, THE CIT(A) HAD NO POWER TO MAKE ANY ADDITIONS UNDER SECTION 251(1)(A) OF THE ACT. ACCORDING TO THE ASSES SEE, EVEN IF THE ASSESSING OFFICER MIGHT HAVE DISCUSSED SUCH AN ISSUE DURING THE COURSE OF HEARING BEFORE HIM, I.E. INCIDENTAL OR COLLATERAL EXAMINATION, THAT ITSELF WOULD NOT HAVE GIVEN POWER TO THE CIT(A) UNLESS THE ISSUE WAS SPECIFICALLY DEALT WITH BY T HE AO IN THE BODY OF THE ORDER OF THE ASSESSMENT. IT IS THIS ASPECT WHICH NEEDS CONSIDERATION IN THE PRESENT CASE. BEFORE ADVERTING TO THIS, WE MAY NOTE THAT, AS A FACT, THE ASSESSING OFFICER HAD ISSUED A QUESTIONNAIRE SPECIFICALLY ON THE AFORESAID TWO ITEMS IN RESPECT OF WHICH CIT(A) HAS MADE THE ADDITIONS BY ENHANCING THE INCOME OF THE ASSESSEE. THE ASSESSEE HAD EVEN REPLIED TO THE SAID QUESTIONNAIRE. IT IS ALSO TO BE KEPT IN MIND THAT IT IS A CASE OF SEARCH AND DURING THE SEARCH E SEIZED. THE ASSESSMENT OF THAT PERIOD HAS BEEN MADE ON THE BASIS OF THAT SEARCH. THE ASSESSING OFFICER UNDERTAKEN THE EXERCISE AS TO WHETHER THE INCOME IS TO BE BROUGHT TO TAX OR NOT ON THE BASIS OF VARIOUS DOCUMENTS SEIZED. BASED ON SEIZED DOCUMENTS RIES WERE RAISED AND THE ASSESSEE HAD EVEN FURNISHED THE SPECIFIC REPLY THERETO BEFORE THE ASSESSING OFFICER. HOWEVER, IT IS ALSO A MATTER OF RECORD THAT IN THE FINAL ASSESSMENT ORDER PASSED, THERE IS NO MENTION ABOUT THE AFORESAID TWO ITEMS. ACCORDING TO CIT(A) HAD DISCOVERED A NEW SOURCE OF INCOME NOT CONSIDERED BY THE AO IN HIS ORDER AND, THEREFORE, THE CIT(A) HAD NO SUCH POWER UNDER SECTION 251(A) (A) OF THE ACT. THE CASE OF THE REVENUE, ON THE OTHER HAND IS THAT THE AO HAD ALREADY CONS IDERED THE SEIZED DOCUMENT AND HAD ASKED FOR THE EXPLANATION OF THE ASSESSEE AND FOUND THE EXPLANATION TO BE ACCEPTABLE BECAUSE OF WHICH THE AO DID NOT MENTION ANYTHING IN THE ASSESSMENT ORDER REGARDING THE TWO ITEMS. ON THE OTHER HAND, THE CIT(A) FOUND SO ME FACTUAL ERROR IN THE EXPLANATION OF THE ASSESSEE AND IN THESE CIRCUMSTANCES, HE MADE THE ENHANCEMENT OF INCOME. IT WAS, THEREFORE, NOT A CASE OF THE DISCOVERY OF NEW SOURCE OF INCOME WHICH WAS NOT CONSIDERED BY THE ASSESSING ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. I.E. WHERE THE AO HAD DEALT THE ISSUE IN THE ASSESSMENT AND WAS THE SUBJECT MATTER OF APPEAL. IN CATEGORY FALLING IN (C) & (E), THE CIT HAS BEEN EMPOWERED TO TAKE AN APPROPRIATE ACTION UNDER SECTION 263 OF THE ACT IN (D) AND (F), APPROPRIATE ACTION UNDER SECTION 147 OF THE ACT CAN BE TAKEN TO TAX THE INCOME WHICH HAS ESCAPED ASSESSMENT OR HAD REMAINED TO BE TAXED. THERE CAN BE SITUATIONS WHERE AN ITEM HAS BEEN DEALT WITH IN THE BODY OF THE ORDER OF SSESSEE BEING AGGRIEVED FROM THE ADDITION OR DISALLOWANCES SO MADE, HAD PREFERRED AN APPEAL BEFORE THE CIT(A) AGAINST THE SAID ADDITION AND DISALLOWANCE, THE SAID DISALLOWANCE AND ADDITION BEING THE SUBJECT MATTER OF APPEAL BEFORE THE CIT(A) IN SUCH CASES, THE CIT(A) HAS BEEN EMPOWERED U/S 251(1)(A) OF THE ACT, TO ENHANCE SUCH AN INCOME WHERE THE ASSESSING OFFICER HAD PROCEEDED TO MAKE ADDITION OR DISALLOWANCE BY DEALING WITH THE SAME IN THE BODY OF ORDER OF ASSESSMENT BY UNDER ASSESSING THE SAME AS THE SAM E WAS THE SUBJECT MATTER OF THE APPEAL AS PER THE GROUNDS OF THE APPEAL RAISED BEFORE HIM. IN OTHER WORDS, THE CIT(A) HAS A POWER OF ENHANCEMENT IN RESPECT OF SUCH ITEM OR ITEMS OF INCOME WHICH HAS BEEN DEALT WITH IN THE BODY OF THE ORDER OF THE ASSESSMENT , AND AROSE FOR HIS CONSIDERATION AS PER THE GROUNDS OF APPEAL RAISED BEFORE HIM, BEING THE SUBJECT MATTER OF THIS IS SUCCINCTLY STATED IN CIT V. EDWARD KEVENTER (SUCCESSORS) (P.) LTD. [1980] 123 ITR THE ONLY QUESTION IS AS TO WHETHER THE CIT(A), IN EXERCISE OF POWER UNDER SECTION 251(1)(A) OF THE ACT HAS THE POWER TO ENHANCE THE ASSESSMENT IN THE MANNER DONE IN THE INSTANT CASE. AS NOTED ABOVE, THE SUBMISSION OF LEARNED COUNSEL FOR THE APPELL ANT WAS THAT THE ASSESSING OFFICER HAD NOT DEALT WITH THE ISSUE IN QUESTION (ON WHICH ADDITIONS ARE MADE) IN THE ASSESSMENT ORDER AT ALL AND THEREFORE, THE CIT(A) HAD NO POWER TO MAKE ANY ADDITIONS UNDER SEE, EVEN IF THE ASSESSING OFFICER MIGHT HAVE DISCUSSED SUCH AN ISSUE DURING THE COURSE OF HEARING BEFORE HIM, I.E. INCIDENTAL OR COLLATERAL EXAMINATION, THAT ITSELF WOULD NOT HAVE GIVEN POWER TO THE CIT(A) UNLESS THE ISSUE HE AO IN THE BODY OF THE ORDER OF THE ASSESSMENT. IT IS THIS BEFORE ADVERTING TO THIS, WE MAY NOTE THAT, AS A FACT, THE ASSESSING OFFICER HAD ISSUED A ITEMS IN RESPECT OF WHICH CIT(A) HAS MADE THE ADDITIONS BY ENHANCING THE INCOME OF THE ASSESSEE. THE ASSESSEE HAD EVEN REPLIED TO THE SAID QUESTIONNAIRE. IT IS ALSO TO BE KEPT IN MIND THAT IT IS A CASE OF SEARCH AND DURING THE SEARCH E SEIZED. THE ASSESSMENT OF THAT PERIOD HAS BEEN MADE ON THE BASIS OF THAT SEARCH. THE ASSESSING OFFICER UNDERTAKEN THE EXERCISE AS TO WHETHER THE INCOME IS TO BE BROUGHT TO TAX OR NOT ON THE BASIS OF VARIOUS DOCUMENTS SEIZED. BASED ON SEIZED DOCUMENTS RIES WERE RAISED AND THE ASSESSEE HAD EVEN FURNISHED THE SPECIFIC REPLY THERETO BEFORE THE ASSESSING OFFICER. HOWEVER, IT IS ALSO A MATTER OF RECORD THAT IN THE FINAL ASSESSMENT ORDER PASSED, THERE IS NO MENTION ABOUT THE AFORESAID TWO ITEMS. ACCORDING TO THE ASSESSEE THE CIT(A) HAD DISCOVERED A NEW SOURCE OF INCOME NOT CONSIDERED BY THE AO IN HIS ORDER AND, THEREFORE, THE CIT(A) HAD NO SUCH POWER UNDER SECTION 251(A) (A) OF THE ACT. THE CASE OF THE IDERED THE SEIZED DOCUMENT AND HAD ASKED FOR THE EXPLANATION OF THE ASSESSEE AND FOUND THE EXPLANATION TO BE ACCEPTABLE BECAUSE OF WHICH THE AO DID NOT MENTION ANYTHING IN THE ASSESSMENT ORDER REGARDING THE TWO ME FACTUAL ERROR IN THE EXPLANATION OF THE ASSESSEE AND IN THESE CIRCUMSTANCES, HE MADE THE ENHANCEMENT OF INCOME. IT WAS, THEREFORE, NOT A CASE OF THE DISCOVERY OF NEW SOURCE OF INCOME WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER. TO APPRECIATE THE R OF THE ACT:- '251. POWERS OF THE COMMISSIONER (APPEALS) (1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS- (A) IN AN APPEAL AGAINST AN ORDER OF ASSES ANNUAL THE ASSESSMENT.' 18. IN RAI BAHADUR HARDUTROY MOTILAL CHAMARIA (SUPRA) WHERE THE SUPREME COURT INTERPRETED THE CORRESPONDING PROVISION UNDER THE OLD INCOME POSITION WAS STATED AS UND ER: 'THE PRINCIPLE THAT EMERGES AS A RESULT OF THE AUTHORITIES OF THIS COURT IS THAT THE APPELLATE ASSISTANT COMMISSIONER HAS NO JURISDICTION UNDER S. 31(3) OF THE ACT, TO ASSESS A SOURCE OF INCOME WHICH HAS NOT BEEN PROCESSED BY THE INCOME NOT DISCLOSED EITHER IN THE RETURNS FILED BY THE ASSESSEE OR IN THE ASSESSMENT ORDER, AND THEREFORE THE APPELLATE ASSISTANT COMMISSIONER CANNOT TRAVEL BEYOND THE SUBJECT OF THE ASSESSMENT. IN OTHER WORDS, THE POWER OF ENHANCEMENT UNDER S. RESTRICTED TO THE SUBJECT CONSIDERED EXPRESSLY OR BY CLEAR IMPLICATION BY THE INCOME VIEW OF THE TAXABILITY OF THE ASSESSEE. IT WAS ARGUED BY M THE APPELLANT THAT BY APPLYING THE PRINCIPLE TO THE PRESENT CASE, THE APPELLATE ASSISTANT COMMISSIONER HAD JURISDICTION TO ENHANCE THE QUANTUM OF INCOME OF THE ASSESSEE. IT WAS POINTED OUT THAT THE FACT OF ALLEGED TRANSFER O NOTED BY THE INCOME- TAX OFFICER AND ALSO THE FACT THAT IT DID NOT REACH FORBESGANJ ON THE SAME DAY. SO IT WAS ARGUED THAT IN THE APPEAL THE APPELLATE ASSISTANT COMMISSIONER HAD JURISDICTION TO DEAL WITH THE QUESTION TO HOLD THAT IT WAS TAXABLE AS UNDISCLOSED PROFITS IN THE HANDS OF THE ASSESSEE. WE ARE UNABLE TO ACCEPT THE ARGUMENT PUT FORWARD ON BEHALF OF THE APPELLANT AS CORRECT. IT IS TRUE THAT THE INCOME - CALCUTTA BRANCH, BUT THE INCOME WITH A VIEW TO TEST THE GENUINENESS OF THE ENTRIES RELATING TO RS. 4,30,000 IN THE BOOKS OF THE FORBESGANJ B RANCH. IT IS MANIFEST THAT THE INCOME REMITTANCE OF RS. 5,85,000 IN THE PROCESS OF ASSESSMENT FROM THE POINT OF VIEW OF ITS TAXABILITY. IT IS ALSO MANIFEST THAT THE APPELLATE ASSISTANT COMMISSIONER HAS CONSIDERED THE AMOUNT OF REMITTANCE OF RS. 5,85,000 FROM A DIFFERENT ASPECT, NAMELY, THE POINT OF VIEW OF ITS TAXABILITY, BUT SINCE THE INCOME QUESTION OF THE TAXABILITY OR NON A SSISTANT COMMISSIONER HAD NOT JURISDICTION, IN THE CIRCUMSTANCES OF THE PRESENT CASE, TO ENHANCE THE TAXABLE INCOME OF THE ASSESSEE ON THE BASIS OF THIS AMOUNT OF RS. 5,85,000 OR OF ANY PORTION THEREOF. AS WE HAVE ALREADY STATED, IT IS NOT OPEN TO THE APPE COMMISSIONER TO TRAVEL OUTSIDE THE RECORD I.E. THE RETURN MADE BY THE ASSESSEE OR THE ASSESSMENT ORDER OF THE INCOME AND THE POWER OF ENHANCEMENT UNDER S. 31(3) OF THE ACT IS RESTRIC INCOME WHICH HAVE BEEN THE SUBJECT FROM THE POINT OF VIEW OF TAXABILITY. IN THIS CONTEXT 'CONSIDERATION' DOES NOT MEAN 'INCIDENTAL' OR 'COLLATERAL' EXAMINATION OF ANY MATTER BY THE INC PROVES OF ASSESSMENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW THAT THE 12 THE UNITED PROVINCES SUGAR COMPANY LTD. OFFICER. TO APPRECIATE THE R IVAL CONTENTIONS, WE REPRODUCE THE PROVISIONS OF SECTION 251(1)(A) '251. POWERS OF THE COMMISSIONER (APPEALS) (1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING (A) IN AN APPEAL AGAINST AN ORDER OF ASSES SMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUAL THE ASSESSMENT.' IN RAI BAHADUR HARDUTROY MOTILAL CHAMARIA (SUPRA) WHERE THE SUPREME COURT INTERPRETED THE CORRESPONDING PROVISION UNDER THE OLD INCOME - TAX ACT, 1922, THE LEGAL POSITION WAS STATED AS UND ER:- 'THE PRINCIPLE THAT EMERGES AS A RESULT OF THE AUTHORITIES OF THIS COURT IS THAT THE APPELLATE ASSISTANT COMMISSIONER HAS NO JURISDICTION UNDER S. 31(3) OF THE ACT, TO ASSESS A SOURCE OF INCOME WHICH HAS NOT BEEN PROCESSED BY THE INCOME - TAX OFFICER AN NOT DISCLOSED EITHER IN THE RETURNS FILED BY THE ASSESSEE OR IN THE ASSESSMENT ORDER, AND THEREFORE THE APPELLATE ASSISTANT COMMISSIONER CANNOT TRAVEL BEYOND THE SUBJECT OF THE ASSESSMENT. IN OTHER WORDS, THE POWER OF ENHANCEMENT UNDER S. RESTRICTED TO THE SUBJECT - MATTER OF ASSESSMENT OR THE SOURCES OF INCOME WHICH HAVE BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMPLICATION BY THE INCOME - TAX OFFICER FROM THE POINT OF VIEW OF THE TAXABILITY OF THE ASSESSEE. IT WAS ARGUED BY M R. VISHWANATH IYER ON BEHALF OF THE APPELLANT THAT BY APPLYING THE PRINCIPLE TO THE PRESENT CASE, THE APPELLATE ASSISTANT COMMISSIONER HAD JURISDICTION TO ENHANCE THE QUANTUM OF INCOME OF THE ASSESSEE. IT WAS POINTED OUT THAT THE FACT OF ALLEGED TRANSFER O F RS. 5,85,000 TO FORBESGANJ BRANCH WAS TAX OFFICER AND ALSO THE FACT THAT IT DID NOT REACH FORBESGANJ ON THE SAME DAY. SO IT WAS ARGUED THAT IN THE APPEAL THE APPELLATE ASSISTANT COMMISSIONER HAD JURISDICTION TO DEAL WITH THE QUESTION OF THE TAXABILITY OF THE AMOUNT OF RS. 5,85,000 AND TO HOLD THAT IT WAS TAXABLE AS UNDISCLOSED PROFITS IN THE HANDS OF THE ASSESSEE. WE ARE UNABLE TO ACCEPT THE ARGUMENT PUT FORWARD ON BEHALF OF THE APPELLANT AS CORRECT. IT IS - TAX OFFI CER HAS REFERRED TO THE REMITTANCE OF RS. 5,85,000 FROM THE CALCUTTA BRANCH, BUT THE INCOME - TAX OFFICER CONSIDERED THE DISPATCH OF THIS AMOUNT ONLY WITH A VIEW TO TEST THE GENUINENESS OF THE ENTRIES RELATING TO RS. 4,30,000 IN THE BOOKS OF RANCH. IT IS MANIFEST THAT THE INCOME - TAX OFFICER DID NOT CONSIDER THE REMITTANCE OF RS. 5,85,000 IN THE PROCESS OF ASSESSMENT FROM THE POINT OF VIEW OF ITS TAXABILITY. IT IS ALSO MANIFEST THAT THE APPELLATE ASSISTANT COMMISSIONER HAS CONSIDERED OF REMITTANCE OF RS. 5,85,000 FROM A DIFFERENT ASPECT, NAMELY, THE POINT OF VIEW OF ITS TAXABILITY, BUT SINCE THE INCOME - TAX OFFICER HAS NOT APPLIED HIS MIND TO THE QUESTION OF THE TAXABILITY OR NON - TAXABILITY OF THE AMOUNT OF RS. 5,85,000 THE APPELLATE SSISTANT COMMISSIONER HAD NOT JURISDICTION, IN THE CIRCUMSTANCES OF THE PRESENT CASE, TO ENHANCE THE TAXABLE INCOME OF THE ASSESSEE ON THE BASIS OF THIS AMOUNT OF RS. 5,85,000 OR OF ANY PORTION THEREOF. AS WE HAVE ALREADY STATED, IT IS NOT OPEN TO THE APPE COMMISSIONER TO TRAVEL OUTSIDE THE RECORD I.E. THE RETURN MADE BY THE ASSESSEE OR THE ASSESSMENT ORDER OF THE INCOME - TAX OFFICER WITH A VIEW TO FIND OUT NEW SOURCES OF INCOME AND THE POWER OF ENHANCEMENT UNDER S. 31(3) OF THE ACT IS RESTRIC TED TO THE SOURCES OF INCOME WHICH HAVE BEEN THE SUBJECT - MATTER OF CONSIDERATION BY THE INCOME FROM THE POINT OF VIEW OF TAXABILITY. IN THIS CONTEXT 'CONSIDERATION' DOES NOT MEAN 'INCIDENTAL' OR 'COLLATERAL' EXAMINATION OF ANY MATTER BY THE INC OME PROVES OF ASSESSMENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW THAT THE ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. IVAL CONTENTIONS, WE REPRODUCE THE PROVISIONS OF SECTION 251(1)(A) (1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING SMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR IN RAI BAHADUR HARDUTROY MOTILAL CHAMARIA (SUPRA) WHERE THE SUPREME COURT TAX ACT, 1922, THE LEGAL 'THE PRINCIPLE THAT EMERGES AS A RESULT OF THE AUTHORITIES OF THIS COURT IS THAT THE APPELLATE ASSISTANT COMMISSIONER HAS NO JURISDICTION UNDER S. 31(3) OF THE ACT, TO ASSESS A TAX OFFICER AN D WHICH IS NOT DISCLOSED EITHER IN THE RETURNS FILED BY THE ASSESSEE OR IN THE ASSESSMENT ORDER, AND THEREFORE THE APPELLATE ASSISTANT COMMISSIONER CANNOT TRAVEL BEYOND THE SUBJECT -MATTER OF THE ASSESSMENT. IN OTHER WORDS, THE POWER OF ENHANCEMENT UNDER S. 31(3) OF THE ACT IS MATTER OF ASSESSMENT OR THE SOURCES OF INCOME WHICH HAVE BEEN TAX OFFICER FROM THE POINT OF R. VISHWANATH IYER ON BEHALF OF THE APPELLANT THAT BY APPLYING THE PRINCIPLE TO THE PRESENT CASE, THE APPELLATE ASSISTANT COMMISSIONER HAD JURISDICTION TO ENHANCE THE QUANTUM OF INCOME OF THE ASSESSEE. IT WAS F RS. 5,85,000 TO FORBESGANJ BRANCH WAS TAX OFFICER AND ALSO THE FACT THAT IT DID NOT REACH FORBESGANJ ON THE SAME DAY. SO IT WAS ARGUED THAT IN THE APPEAL THE APPELLATE ASSISTANT COMMISSIONER HAD OF THE TAXABILITY OF THE AMOUNT OF RS. 5,85,000 AND TO HOLD THAT IT WAS TAXABLE AS UNDISCLOSED PROFITS IN THE HANDS OF THE ASSESSEE. WE ARE UNABLE TO ACCEPT THE ARGUMENT PUT FORWARD ON BEHALF OF THE APPELLANT AS CORRECT. IT IS CER HAS REFERRED TO THE REMITTANCE OF RS. 5,85,000 FROM THE TAX OFFICER CONSIDERED THE DISPATCH OF THIS AMOUNT ONLY WITH A VIEW TO TEST THE GENUINENESS OF THE ENTRIES RELATING TO RS. 4,30,000 IN THE BOOKS OF TAX OFFICER DID NOT CONSIDER THE REMITTANCE OF RS. 5,85,000 IN THE PROCESS OF ASSESSMENT FROM THE POINT OF VIEW OF ITS TAXABILITY. IT IS ALSO MANIFEST THAT THE APPELLATE ASSISTANT COMMISSIONER HAS CONSIDERED OF REMITTANCE OF RS. 5,85,000 FROM A DIFFERENT ASPECT, NAMELY, THE POINT OF TAX OFFICER HAS NOT APPLIED HIS MIND TO THE TAXABILITY OF THE AMOUNT OF RS. 5,85,000 THE APPELLATE SSISTANT COMMISSIONER HAD NOT JURISDICTION, IN THE CIRCUMSTANCES OF THE PRESENT CASE, TO ENHANCE THE TAXABLE INCOME OF THE ASSESSEE ON THE BASIS OF THIS AMOUNT OF RS. 5,85,000 OR OF ANY PORTION THEREOF. AS WE HAVE ALREADY STATED, IT IS NOT OPEN TO THE APPE LLATE ASSISTANT COMMISSIONER TO TRAVEL OUTSIDE THE RECORD I.E. THE RETURN MADE BY THE ASSESSEE OR THE TAX OFFICER WITH A VIEW TO FIND OUT NEW SOURCES OF INCOME TED TO THE SOURCES OF MATTER OF CONSIDERATION BY THE INCOME -TAX OFFICER FROM THE POINT OF VIEW OF TAXABILITY. IN THIS CONTEXT 'CONSIDERATION' DOES NOT MEAN OME -TAX OFFICER IN THE PROVES OF ASSESSMENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW THAT THE INCOME- TAX OFFICER APPLIED HIS MIND TO THE PARTICULAR SUBJECT SOURCE OF INCOME WITH A VIEW TO ITS TAXABILITY OR TO ITS NO INCIDENTAL CONNECTION. IN THE PRESENT CASE IT IS MANIFEST THAT THE INCOME NOT CONSIDERED THE ENTRY OF RS. 5,85,000 FROM THE POINTS OF VIEW OF ITS TAXABILITY AND THEREFORE THE APPELLATE ASSISTANT COMMISSIONER HAD 31 OF THE ACT, TO ENHANCE THE ASSESSMENT'. 19. TO THE SAME EFFECT IS THE JUDGMENT OF ANOTHER DIVISION BENCH OF THIS COURT IN CIT V. UNION TYRES [1999] 240 ITR 556 / CONSIDER NEW SCOPE OF INCOME UNDER SECTION 251(1) OF THE ACT. FOLLOWING QUESTION FROM THE SAME JUDGMENT CAN APTLY BE: 'SECTION 251 OF THE ACT PRESCRIBES THE PO NOW COMMISSIONER (APPEALS). SECTION 251(1)(A) OF THE ACT EMPOWERS THE APPELLATE ASSISTANT COMMISSIONER IN DISPOSING OF AN APPEAL BY THE ASSESSED AGAINST AN ORDER OF ASSESSMENT TO CONFIRM, REDUCE, ENHANCE OR ANNU THE CASE BACK TO THE INCOME TAX OFFICER FOR MAKING FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE APPELLATE ASSISTANT COMMISSIONER. 'EXPLANATION' TO SECTION 251 PROVIDES THAT THE APPELLATE COMMISS OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED NOTWITHSTANDING THAT SUCH A MATTER WAS NOT RAISED BEFORE THE APPELLATE COMMISSIONER BY THE APPELLANT. THE ISSUE WITH REGARD TO THE SCOPE OF P OF AN APPEAL HAS COME UP BEFORE THE COURTS UMPTEEN TIMES BUT WE DO NOT PROPOSE TO BURDEN THE JUDGMENT BY MAKING REFERENCE TO ALL THE DECISIONS ON THE POINT. WE WILL NOTICE A FEW DECISIONS WHICH WE CONSIDE BOMBAY V. SHAPOORJI PALLONJI MISTRY [1962] CORRESPONDING PROVISIONS OF THE INDIAN INCOME TAX ACT, 1922, RELATING TO THE JURISDIC OF THE APPELLATE COMMISSIONER IN SUCH AN APPEAL, THE SUPREME COURT HELD THAT, IN AN APPEAL FILED BY THE ASSESSEE, THE APPELLATE ASSISTANT COMMISSIONER HAS NO POWER TO ENHANCE THE ASSESSMENT BY DISCOVERING A NEW SOURCE OF INCOME, NOT CONSIDERED BY THE INCOME TAX OFFICER IN THE ORDER APPEALED AGAINST. SIMILAR VIEWS WERE EXPRESSED BY THE APEX COURT IN CIT (CENTRAL) CALCUTTA V. RAI BAHADUR HARDUTORY MOTILAL CHAMARIA [1967] 66 ITR 443 (SC). IT WAS HELD THAT THE POWER OF ENH 1922 ACT WAS RESTRICTED TO THE SUBJECT WHICH HAD BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMPLICATION BY THE ITO FORM THE POINT OF VIEW OF TAXABILITY AND THAT THE APPELLATE C OF INCOME WHICH HAD BEEN PROCESSED BY THE ASSESSING OFFICER.' AT THE SAME TIME, THE COURT ALSO CLARIFIED THAT THE POWER OF THE FIRST APPELLATE AUTHORITY IS NOT RESTRICTED TO EXAMINE ONLY THOSE ASPECTS OF ASSESSME GRIEVANCE BUT IT COVERS THE WHOLE ASSESSMENT TO CORRECT THE ORDER OF THE ASSESSING OFFICER NOT ONLY WITH REGARD TO THE MATTER RAISED BY THE ASSESSEE IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSI OF ASSESSMENT. THIS PRINCIPLE CAN BE TRACED TO THE FOLLOWING DISCUSSION IN THE SAID JUDGMENT: 'THUS, THE PRINCIPLE EMERGING FROM THE AFORENOTED PRONOUNCEMENTS OF THE SUPREME COURT IS, THAT THE FIR SECTION 251(1)(A) OF THE ACT AND ONCE AN ASSESSMENT ORDER IS BROUGHT BEFORE THE AUTHORITY, HIS COMPETENCE IS NOT RESTRICTED TO EXAMINING ONLY THOSE ASPECTS OF THE ASSESSMENT ABOUT WHICH THE ASS 13 THE UNITED PROVINCES SUGAR COMPANY LTD. TAX OFFICER APPLIED HIS MIND TO THE PARTICULAR SUBJECT - MATTER OR THE PARTICULAR SOURCE OF INCOME WITH A VIEW TO ITS TAXABILITY OR TO ITS NO N- TAXABILITY AND NOT TO ANY INCIDENTAL CONNECTION. IN THE PRESENT CASE IT IS MANIFEST THAT THE INCOME NOT CONSIDERED THE ENTRY OF RS. 5,85,000 FROM THE POINTS OF VIEW OF ITS TAXABILITY AND THEREFORE THE APPELLATE ASSISTANT COMMISSIONER HAD NO JURISDICTION IN AN APPEAL UNDER S. 31 OF THE ACT, TO ENHANCE THE ASSESSMENT'. TO THE SAME EFFECT IS THE JUDGMENT OF ANOTHER DIVISION BENCH OF THIS COURT IN CIT V. UNION / 107 TAXMAN 447 REITERATING THAT FIRST APPELLATE AUTHORITY CANNOT CONSIDER NEW SCOPE OF INCOME UNDER SECTION 251(1) OF THE ACT. FOLLOWING QUESTION FROM THE SAME JUDGMENT CAN APTLY BE: 'SECTION 251 OF THE ACT PRESCRIBES THE PO WER OF THE APPELLATE ASSISTANT COMMISSIONER, NOW COMMISSIONER (APPEALS). SECTION 251(1)(A) OF THE ACT EMPOWERS THE APPELLATE ASSISTANT COMMISSIONER IN DISPOSING OF AN APPEAL BY THE ASSESSED AGAINST AN ORDER OF ASSESSMENT TO CONFIRM, REDUCE, ENHANCE OR ANNU L THE ASSESSMENT OR TO SET ASIDE AND REFER THE CASE BACK TO THE INCOME TAX OFFICER FOR MAKING FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE APPELLATE ASSISTANT COMMISSIONER. 'EXPLANATION' TO SECTION 251 PROVIDES THAT THE APPELLATE COMMISS IONER MAY HEAR AND DECIDE ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED NOTWITHSTANDING THAT SUCH A MATTER WAS NOT RAISED BEFORE THE APPELLATE COMMISSIONER BY THE APPELLANT. THE ISSUE WITH REGARD TO THE SCOPE OF P OWERS OF THE FIRST APPELLATE AUTHORITY IN DISPOSING OF AN APPEAL HAS COME UP BEFORE THE COURTS UMPTEEN TIMES BUT WE DO NOT PROPOSE TO BURDEN THE JUDGMENT BY MAKING REFERENCE TO ALL THE DECISIONS ON THE POINT. WE WILL NOTICE A FEW DECISIONS WHICH WE CONSIDE R ARE RELEVANT TO ANSWER THE QUESTION REFERRED. IN CIT, BOMBAY V. SHAPOORJI PALLONJI MISTRY [1962] 44 ITR 891 (SC), WHILE CONSTRUING THE CORRESPONDING PROVISIONS OF THE INDIAN INCOME TAX ACT, 1922, RELATING TO THE JURISDIC OF THE APPELLATE COMMISSIONER IN SUCH AN APPEAL, THE SUPREME COURT HELD THAT, IN AN APPEAL FILED BY THE ASSESSEE, THE APPELLATE ASSISTANT COMMISSIONER HAS NO POWER TO ENHANCE THE ASSESSMENT BY DISCOVERING A NEW SOURCE OF INCOME, NOT CONSIDERED BY THE INCOME TAX OFFICER IN THE ORDER APPEALED AGAINST. SIMILAR VIEWS WERE EXPRESSED BY THE APEX COURT IN CIT (CENTRAL) CALCUTTA V. RAI BAHADUR HARDUTORY MOTILAL CHAMARIA [1967] (SC). IT WAS HELD THAT THE POWER OF ENH ANCEMENT UNDER SECTION 31(3) OF THE 1922 ACT WAS RESTRICTED TO THE SUBJECT - MATTER OF THE ASSESSMENT OR THE SOURCE OF INCOME WHICH HAD BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMPLICATION BY THE ITO FORM THE POINT OF VIEW OF TAXABILITY AND THAT THE APPELLATE C OMMISSIONER HAD NO POWER TO ASSESS A SOURCE OF INCOME WHICH HAD BEEN PROCESSED BY THE ASSESSING OFFICER.' AT THE SAME TIME, THE COURT ALSO CLARIFIED THAT THE POWER OF THE FIRST APPELLATE AUTHORITY IS NOT RESTRICTED TO EXAMINE ONLY THOSE ASPECTS OF ASSESSME NT ABOUT WHICH THE ASSESSEE MAKES A GRIEVANCE BUT IT COVERS THE WHOLE ASSESSMENT TO CORRECT THE ORDER OF THE ASSESSING OFFICER NOT ONLY WITH REGARD TO THE MATTER RAISED BY THE ASSESSEE IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSI DERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF ASSESSMENT. THIS PRINCIPLE CAN BE TRACED TO THE FOLLOWING DISCUSSION IN THE SAID JUDGMENT: 'THUS, THE PRINCIPLE EMERGING FROM THE AFORENOTED PRONOUNCEMENTS OF THE SUPREME COURT IS, THAT THE FIR ST APPELLATE AUTHORITY IS INVESTED WITH VERY WIDE POWERS UNDER SECTION 251(1)(A) OF THE ACT AND ONCE AN ASSESSMENT ORDER IS BROUGHT BEFORE THE AUTHORITY, HIS COMPETENCE IS NOT RESTRICTED TO EXAMINING ONLY THOSE ASPECTS OF THE ASSESSMENT ABOUT WHICH THE ASS ESSED MAKES A GRIEVANCE AND RANGES OVER THE WHOLE ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. MATTER OR THE PARTICULAR TAXABILITY AND NOT TO ANY INCIDENTAL CONNECTION. IN THE PRESENT CASE IT IS MANIFEST THAT THE INCOME -TAX OFFICER HAS NOT CONSIDERED THE ENTRY OF RS. 5,85,000 FROM THE POINTS OF VIEW OF ITS TAXABILITY AND NO JURISDICTION IN AN APPEAL UNDER S. TO THE SAME EFFECT IS THE JUDGMENT OF ANOTHER DIVISION BENCH OF THIS COURT IN CIT V. UNION REITERATING THAT FIRST APPELLATE AUTHORITY CANNOT CONSIDER NEW SCOPE OF INCOME UNDER SECTION 251(1) OF THE ACT. FOLLOWING QUESTION FROM THE WER OF THE APPELLATE ASSISTANT COMMISSIONER, NOW COMMISSIONER (APPEALS). SECTION 251(1)(A) OF THE ACT EMPOWERS THE APPELLATE ASSISTANT COMMISSIONER IN DISPOSING OF AN APPEAL BY THE ASSESSED AGAINST AN ORDER OF L THE ASSESSMENT OR TO SET ASIDE AND REFER THE CASE BACK TO THE INCOME TAX OFFICER FOR MAKING FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE APPELLATE ASSISTANT COMMISSIONER. 'EXPLANATION' TO SECTION IONER MAY HEAR AND DECIDE ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED NOTWITHSTANDING THAT SUCH A MATTER WAS NOT RAISED BEFORE THE APPELLATE COMMISSIONER BY THE APPELLANT. OWERS OF THE FIRST APPELLATE AUTHORITY IN DISPOSING OF AN APPEAL HAS COME UP BEFORE THE COURTS UMPTEEN TIMES BUT WE DO NOT PROPOSE TO BURDEN THE JUDGMENT BY MAKING REFERENCE TO ALL THE DECISIONS ON THE POINT. WE WILL NOTICE R ARE RELEVANT TO ANSWER THE QUESTION REFERRED. IN CIT, (SC), WHILE CONSTRUING THE CORRESPONDING PROVISIONS OF THE INDIAN INCOME TAX ACT, 1922, RELATING TO THE JURISDIC TION OF THE APPELLATE COMMISSIONER IN SUCH AN APPEAL, THE SUPREME COURT HELD THAT, IN AN APPEAL FILED BY THE ASSESSEE, THE APPELLATE ASSISTANT COMMISSIONER HAS NO POWER TO ENHANCE THE ASSESSMENT BY DISCOVERING A NEW SOURCE OF INCOME, NOT CONSIDERED BY THE INCOME TAX OFFICER IN THE ORDER APPEALED AGAINST. SIMILAR VIEWS WERE EXPRESSED BY THE APEX COURT IN CIT (CENTRAL) CALCUTTA V. RAI BAHADUR HARDUTORY MOTILAL CHAMARIA [1967] ANCEMENT UNDER SECTION 31(3) OF THE MATTER OF THE ASSESSMENT OR THE SOURCE OF INCOME WHICH HAD BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMPLICATION BY THE ITO FORM THE POINT OF OMMISSIONER HAD NO POWER TO ASSESS A SOURCE AT THE SAME TIME, THE COURT ALSO CLARIFIED THAT THE POWER OF THE FIRST APPELLATE AUTHORITY IS NOT NT ABOUT WHICH THE ASSESSEE MAKES A GRIEVANCE BUT IT COVERS THE WHOLE ASSESSMENT TO CORRECT THE ORDER OF THE ASSESSING OFFICER NOT ONLY WITH REGARD TO THE MATTER RAISED BY THE ASSESSEE IN APPEAL BUT ALSO WITH REGARD TO ANY DERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF ASSESSMENT. THIS PRINCIPLE CAN BE TRACED TO THE FOLLOWING DISCUSSION IN THE SAID JUDGMENT: 'THUS, THE PRINCIPLE EMERGING FROM THE AFORENOTED PRONOUNCEMENTS OF THE SUPREME ST APPELLATE AUTHORITY IS INVESTED WITH VERY WIDE POWERS UNDER SECTION 251(1)(A) OF THE ACT AND ONCE AN ASSESSMENT ORDER IS BROUGHT BEFORE THE AUTHORITY, HIS COMPETENCE IS NOT RESTRICTED TO EXAMINING ONLY THOSE ASPECTS OF THE ESSED MAKES A GRIEVANCE AND RANGES OVER THE WHOLE ASSESSMENT TO CORRECT THE ASSESSING OFFICER NOT ONLY WITH REGARD TO A MATTER RAISED BY THE ASSESSED IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND SOLITARY BUT SIGNIFICANT LIMITATION TO THE POWER OF REVISION, VIZ. THAT IT IS NOT OPEN TO THE APPELLATE COMMISSIONER TO INTRODUCE IN THE ASSESSMENT A NEW SOURCE OF INCOME AND THE ASSESSMENT HAS TO BE CONFINED TO THOSE ITEMS OF INCOME WHICH WHERE THE SUBJECT OF ORIGINAL ASSESSMENT.' THE AFORESAID VIEW TAKEN BY THE DIVISION BENCH WAS CONFIRMED BY THE FULL BENCH OF THIS COURT IN SARDARI LAL & CO. (SUPRA) OBSERVING AS UNDER: 'LOOKING FROM THE A QUESTION OF TAXABILITY OF INCOME FROM A NEW SOURCE OF INCOME IS CONCERNED, WHICH HAD NOT BEEN CONSIDERED BY THE ASSESSING OFFICER, THE JURISDICTION TO DEAL WITH THE SAME IN APPROPRIATE CASES M AY BE DEALT WITH UNDER SECTION 147/148 OF THE ACT AND SECTION 263 OF THE ACT, IF REQUISITE CONDITIONS ARE FULFILLLED. IT IS INCONCEIVABLE THAT IN THE PRESENCE OF SUCH SPECIFIC PROVISIONS, A SIMILAR POWER IS AVAILABLE TO THE FIRST APPELLATE AUTHORITY. THAT BEING THE POSITION, THE DECISION IN UNION TYRES' CASE (SUPRA) OF THIS COURT EXPRESSES THE CORRECT VIEW AND DOES NOT NEED RECONSIDERATION. THIS REFERENCE IS ACCORDINGLY DISPOSED OF.' 20. MR. SABHARWAL, LEARNED COUNSEL APPEARING FOR THE REVENUE COULD NOT AND THE AFORESAID POSITION IN LAW. HIS SUBMISSION WAS THAT THE ASSESSING OFFICER HAD CONSIDERED THE ISSUE WHICH WAS CLEAR FROM THE QUESTIONNAIRE AND, THEREFORE THE CIT(A) WAS VESTED WITH POWER TO LOOK INTO THE SAME. AS POINTED OUT ABOVE, THE A ON THE BASIS OF DOCUMENTS SEIZED DURING THE SEARCH. HE HAD SPECIFICALLY UNDERTAKEN THE EXERCISE AS TO WHETHER THE INCOME HAS TO BE BROUGHT TO TAX OR NOT ON THE BASIS OF VARIOUS SEIZED DOCUMENTS. THE REPLY OF THE DOCUMENTS (PAGE 21) WHICH RELATED TO THE TRANSACTIONS IN QUESTION. IT WAS POINTED OUT THAT THE DOCUMENT CONTAINS VARIOUS NOTINGS OF CASH PAYMENTS, ADVANCES ETC. MADE THROUGH MR. TAMEEZ. THE ASSE SSEE WAS ASKED TO FURNISH COMPLETE EXPLANATION THEREOF WITH SOURCES FOR THE SAME AND WAS ASKED TO EXPLAIN WITH DOCUMENTARY EVIDENCES WHERE IT WAS ACCOUNTED FOR. IT WAS ALSO MENTIONED THAT THE DOCUMENT PERTAINS TO THE PROPERTY AT BANGALORE AND THE ASSESSEE WAS REQUIRED TO FURNISH FULL AND COMPLETE DETAILS THEREOF. PAGE NO. 21 READS AS UNDER: 'I. R.T. NAGAR THAT GMS CONSTRUCTION CO. PVT. WANTED TO START THE DEVELOPMENT OF SOME PROPERTIES AT R.T. NAGAR, BANGALORE ALONG WITH MR. JEETU UNDERSTANDING 60% OF BUILT UP AREA WOULD GO TO MR. JEETU AND THE BALANCE 40% TO GMS CONSTRUCTION CO. PVT. LTD. IN CONSIDERATION OF THIS UNDER STANDING MR. JEETU WAS TO PAY RS. 50 LACS AS NON- ADJUSTABLE DEPOSIT. FROM MR. JEETU AND THE SAME WAS DEPOSITED WITH CANARA BANK, BANGALORE ON 16 1995. THE COPY OF BANK STATEMENT IS ENCLOSED HEREWITH. THE BALANCE AMOUNT OF RS. 25 LACS WAS NOT RECEIVED AS THE JOINT DEVEL DEPRESSION IN THE REAL ESTATE BUSINESS AND FALL IN THE MARKET PRICES OF THE PROPERTIES. THIS AMOUNT HAS BEEN ADJUSTED AGAINST THE AMOUNT DUE TO MR./MRS. G.M. SINGH FROM SOLOMAN DAVID HOLDING PRIVATE LIMITED. IT MAY HOW NOT CONNECTED WITH THIS TRANSACTION IN HIS INDIVIDUAL CAPACITY AND THE SAME ARE NOT RELATED TO HIS BOOKS OF ACCOUNT. II. SHANTI NAGAR 14 THE UNITED PROVINCES SUGAR COMPANY LTD. ASSESSMENT TO CORRECT THE ASSESSING OFFICER NOT ONLY WITH REGARD TO A MATTER RAISED BY THE ASSESSED IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF ASSESSMENT. HOWEVER, THERE IS A SOLITARY BUT SIGNIFICANT LIMITATION TO THE POWER OF REVISION, VIZ. THAT IT IS NOT OPEN TO THE APPELLATE COMMISSIONER TO INTRODUCE IN THE ASSESSMENT A NEW SOURCE OF INCOME AND THE BE CONFINED TO THOSE ITEMS OF INCOME WHICH WHERE THE SUBJECT OF ORIGINAL ASSESSMENT.' THE AFORESAID VIEW TAKEN BY THE DIVISION BENCH WAS CONFIRMED BY THE FULL BENCH OF THIS COURT IN SARDARI LAL & CO. (SUPRA) OBSERVING AS UNDER: - 'LOOKING FROM THE A FORESAID ANGLES, THE INEVITABLE CONCLUSION IS THAT WHENEVER THE QUESTION OF TAXABILITY OF INCOME FROM A NEW SOURCE OF INCOME IS CONCERNED, WHICH HAD NOT BEEN CONSIDERED BY THE ASSESSING OFFICER, THE JURISDICTION TO DEAL WITH THE SAME IN AY BE DEALT WITH UNDER SECTION 147/148 OF THE ACT AND SECTION 263 OF THE ACT, IF REQUISITE CONDITIONS ARE FULFILLLED. IT IS INCONCEIVABLE THAT IN THE PRESENCE OF SUCH SPECIFIC PROVISIONS, A SIMILAR POWER IS AVAILABLE TO THE FIRST APPELLATE AUTHORITY. THAT BEING THE POSITION, THE DECISION IN UNION TYRES' CASE (SUPRA) OF THIS COURT EXPRESSES THE CORRECT VIEW AND DOES NOT NEED RECONSIDERATION. THIS REFERENCE IS ACCORDINGLY DISPOSED MR. SABHARWAL, LEARNED COUNSEL APPEARING FOR THE REVENUE COULD NOT AND THE AFORESAID POSITION IN LAW. HIS SUBMISSION WAS THAT THE ASSESSING OFFICER HAD CONSIDERED THE ISSUE WHICH WAS CLEAR FROM THE QUESTIONNAIRE AND, THEREFORE THE CIT(A) WAS VESTED WITH POWER TO LOOK INTO THE SAME. AS POINTED OUT ABOVE, THE A SSESSING OFFICER HAD ISSUED A QUESTIONNAIRE ON THE BASIS OF DOCUMENTS SEIZED DURING THE SEARCH. HE HAD SPECIFICALLY UNDERTAKEN THE EXERCISE AS TO WHETHER THE INCOME HAS TO BE BROUGHT TO TAX OR NOT ON THE BASIS OF VARIOUS SEIZED DOCUMENTS. THE REPLY OF THE ASSESSEE WAS ELICITED ON THIS VERY ASPECT AS WELL I.E. SEIZED DOCUMENTS (PAGE 21) WHICH RELATED TO THE TRANSACTIONS IN QUESTION. IT WAS POINTED OUT THAT THE DOCUMENT CONTAINS VARIOUS NOTINGS OF CASH PAYMENTS, ADVANCES ETC. MADE THROUGH MR. SSEE WAS ASKED TO FURNISH COMPLETE EXPLANATION THEREOF WITH SOURCES FOR THE SAME AND WAS ASKED TO EXPLAIN WITH DOCUMENTARY EVIDENCES WHERE IT WAS ACCOUNTED FOR. IT WAS ALSO MENTIONED THAT THE DOCUMENT PERTAINS TO THE PROPERTY AT BANGALORE AND THE ASSESSEE WAS REQUIRED TO FURNISH FULL AND COMPLETE DETAILS THEREOF. PAGE NO. 21 READS AS UNDER: THAT GMS CONSTRUCTION CO. PVT. WANTED TO START THE DEVELOPMENT OF SOME PROPERTIES AT R.T. NAGAR, BANGALORE ALONG WITH MR. JEETU ON JOINT VENTURE BASIS. AS PER THEIR VERBAL UNDERSTANDING 60% OF BUILT UP AREA WOULD GO TO MR. JEETU AND THE BALANCE 40% TO GMS CONSTRUCTION CO. PVT. LTD. IN CONSIDERATION OF THIS UNDER STANDING MR. JEETU WAS TO PAY ADJUSTABLE DEPOSIT. THAT INITIALLY A DEPOSIT OF RS. 25 LACS WAS RECEIVED FROM MR. JEETU AND THE SAME WAS DEPOSITED WITH CANARA BANK, BANGALORE ON 16 1995. THE COPY OF BANK STATEMENT IS ENCLOSED HEREWITH. THE BALANCE AMOUNT OF RS. 25 LACS WAS NOT RECEIVED AS THE JOINT DEVEL OPMENT COULD NOT BE CARRIED ON DUE TO DEPRESSION IN THE REAL ESTATE BUSINESS AND FALL IN THE MARKET PRICES OF THE PROPERTIES. THIS AMOUNT HAS BEEN ADJUSTED AGAINST THE AMOUNT DUE TO MR./MRS. G.M. SINGH FROM SOLOMAN DAVID HOLDING PRIVATE LIMITED. IT MAY HOW EVER BE STATED THAT THE ASSESSEE IS NOT CONNECTED WITH THIS TRANSACTION IN HIS INDIVIDUAL CAPACITY AND THE SAME ARE NOT RELATED TO HIS BOOKS OF ACCOUNT. ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. ASSESSMENT TO CORRECT THE ASSESSING OFFICER NOT ONLY WITH REGARD TO A MATTER RAISED BY THE ASSESSED IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED DETERMINED IN THE COURSE OF ASSESSMENT. HOWEVER, THERE IS A SOLITARY BUT SIGNIFICANT LIMITATION TO THE POWER OF REVISION, VIZ. THAT IT IS NOT OPEN TO THE APPELLATE COMMISSIONER TO INTRODUCE IN THE ASSESSMENT A NEW SOURCE OF INCOME AND THE BE CONFINED TO THOSE ITEMS OF INCOME WHICH WHERE THE SUBJECT -MATTER THE AFORESAID VIEW TAKEN BY THE DIVISION BENCH WAS CONFIRMED BY THE FULL BENCH OF THIS COURT FORESAID ANGLES, THE INEVITABLE CONCLUSION IS THAT WHENEVER THE QUESTION OF TAXABILITY OF INCOME FROM A NEW SOURCE OF INCOME IS CONCERNED, WHICH HAD NOT BEEN CONSIDERED BY THE ASSESSING OFFICER, THE JURISDICTION TO DEAL WITH THE SAME IN AY BE DEALT WITH UNDER SECTION 147/148 OF THE ACT AND SECTION 263 OF THE ACT, IF REQUISITE CONDITIONS ARE FULFILLLED. IT IS INCONCEIVABLE THAT IN THE PRESENCE OF SUCH SPECIFIC PROVISIONS, A SIMILAR POWER IS AVAILABLE TO THE FIRST APPELLATE AUTHORITY. THAT BEING THE POSITION, THE DECISION IN UNION TYRES' CASE (SUPRA) OF THIS COURT EXPRESSES THE CORRECT VIEW AND DOES NOT NEED RECONSIDERATION. THIS REFERENCE IS ACCORDINGLY DISPOSED MR. SABHARWAL, LEARNED COUNSEL APPEARING FOR THE REVENUE COULD NOT AND DID NOT DISPUTE THE AFORESAID POSITION IN LAW. HIS SUBMISSION WAS THAT THE ASSESSING OFFICER HAD CONSIDERED THE ISSUE WHICH WAS CLEAR FROM THE QUESTIONNAIRE AND, THEREFORE THE CIT(A) WAS VESTED WITH POWER SSESSING OFFICER HAD ISSUED A QUESTIONNAIRE ON THE BASIS OF DOCUMENTS SEIZED DURING THE SEARCH. HE HAD SPECIFICALLY UNDERTAKEN THE EXERCISE AS TO WHETHER THE INCOME HAS TO BE BROUGHT TO TAX OR NOT ON THE BASIS OF VARIOUS ASSESSEE WAS ELICITED ON THIS VERY ASPECT AS WELL I.E. SEIZED DOCUMENTS (PAGE 21) WHICH RELATED TO THE TRANSACTIONS IN QUESTION. IT WAS POINTED OUT THAT THE DOCUMENT CONTAINS VARIOUS NOTINGS OF CASH PAYMENTS, ADVANCES ETC. MADE THROUGH MR. SSEE WAS ASKED TO FURNISH COMPLETE EXPLANATION THEREOF WITH SOURCES FOR THE SAME AND WAS ASKED TO EXPLAIN WITH DOCUMENTARY EVIDENCES WHERE IT WAS ACCOUNTED FOR. IT WAS ALSO MENTIONED THAT THE DOCUMENT PERTAINS TO THE PROPERTY AT BANGALORE AND THE ASSESSEE WAS REQUIRED TO FURNISH FULL AND COMPLETE DETAILS THEREOF. PAGE NO. 21 READS AS UNDER: - THAT GMS CONSTRUCTION CO. PVT. WANTED TO START THE DEVELOPMENT OF SOME PROPERTIES AT ON JOINT VENTURE BASIS. AS PER THEIR VERBAL UNDERSTANDING 60% OF BUILT UP AREA WOULD GO TO MR. JEETU AND THE BALANCE 40% TO GMS CONSTRUCTION CO. PVT. LTD. IN CONSIDERATION OF THIS UNDER STANDING MR. JEETU WAS TO PAY THAT INITIALLY A DEPOSIT OF RS. 25 LACS WAS RECEIVED FROM MR. JEETU AND THE SAME WAS DEPOSITED WITH CANARA BANK, BANGALORE ON 16 -10- 1995. THE COPY OF BANK STATEMENT IS ENCLOSED HEREWITH. THE BALANCE AMOUNT OF RS. 25 OPMENT COULD NOT BE CARRIED ON DUE TO DEPRESSION IN THE REAL ESTATE BUSINESS AND FALL IN THE MARKET PRICES OF THE PROPERTIES. THIS AMOUNT HAS BEEN ADJUSTED AGAINST THE AMOUNT DUE TO MR./MRS. G.M. SINGH FROM EVER BE STATED THAT THE ASSESSEE IS NOT CONNECTED WITH THIS TRANSACTION IN HIS INDIVIDUAL CAPACITY AND THE SAME ARE NOT THIS AGAIN WAS A JOINT VENTURE PROPOSAL BY GMS CONSTRUCTION CO. PVT. LTD. WITH MR. JEE FOR THE DEVELOPMENT OF PROPERTIES AT SHANTI NAGAR. THAT BOTH MR. JEETU AND GMS CONSTRUCTION CO. PVT. LTD, WERE TO INVEST AND SHARE THE PROFIT IN EQUAL PROPORTION AS STATED ON THE PAPER UNDER REFERENCE. ALL THE INITIAL PAYMENTS FOR THE PURCHASE OF LAND W ERE MADE BY GMS CONSTRUCTION CO. PVT. LTD. AND NO CONTRIBUTION WAS RECEIVED FROM MR. JEETU. THIS JOINT VENTURE COULD NOT BE FINALIZED DUE TO THE SAME REASON AS STATE ABOVE I.E. RECESSION IN THE REAL ESTATE BUSINESS AND FALL IN THE MARKET PRICE OF THE PROPE ADVANCES MADE FOR SHANTI NAGAR PROPERTIES ARE NOT RELATED TO THE ASSESSEE AND HENCE TO HIS BLOCK ASSESSMENT.' THE ASSESSEE FURNISHED ITS COMMENTS TO THE SAID PAGE WHICH REFLECTED THE TRANSACTIONS RELATING TO PROPERTY PURCHASE AT R.T. NAGAR, SHAN VERY PROPERTY IN RESPECT OF WHICH ADDITIONS ARE MADE BY THE CIT(A) WAS THE SUBJECT MATTER OF CONSIDERATION BEFORE THE ASSESSING OFFICER. IT IS A DIFFERENT MATTER THAT AFTER THE REPLY SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER CHOSE NOT TO MAKE ANY ADDITION ON THIS COUNT AND NOTHING IS MENTIONED IN THE ASSESSMENT ORDER. THAT, HOWEVER, WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THIS MATTER. IT WAS IN OUR OPINION DULY CONSIDERED. 21. MR. C.S. AGGARWAL, LEARNED SENIOR COUNSEL HAD SUBMITTED THAT AS PER THE JUDGMENTS OF THIS COURT IN UNION TYRES (SUPRA) AND SARDARI LAL & APPELLATE AUTHORITY COULD EXERCISE HIS POWERS ONLY 'WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF THE ASSESSMENT. HIS SUBMISSION WAS THAT THERE 22. WE DO NOT AGREE WITH THIS SUBMISSION. OBVIOUSLY, WHEN THIS MATTER/ITEM IS CONSIDERED BUT ADDITION ON THAT ACCOUNT IS NOT MADE IN THE ASSESSMENT ORDER, IT WOULD CLEARLY FOLLOW THAT THE ASSESSING OFFICER HAD 'DETERMINED' THE S MAKE ANY ADDITION. 23. IN THE CASE OF SHAPOORJI PALLONJI MISTRY V. CIT [1958] AFFIRMED BY THE SUPREME COURT), THE BOMBAY HIGH COURT CLARI WOULD NOT MEAN SOURCE IN THE SENSE OF HEAD OF INCOME AS USED IN THE INCOME WOULD MEAN A SPECIFIC SOURCE FROM WHICH A PARTICULAR INCOME SPANK OR AROSE. IT WAS CLARIFIED THAT:- '.IF A PARTICULAR SOURCE OR ITEM OF IN OFFICER AND HAD BEEN SUBJECTED TO THE PROCESS OF ASSESSMENT, THEN EVEN THOUGH THE ASSESSEE MAY NOT HAVE APPEALED AGAINST THAT PARTICULAR SOURCE OR ITEM, ONE ONCE THE APPEAL WAS BEFORE THE APPELLATE ASSISTANT COMMI TO THE SUBJECT- MATTER OF THE APPEAL, BUT TO THE WHOLE SUBJECT GAVE THE POWER TO THE APPELLATE ASSISTANT COMMISSIONER WAS THE FACT THAT A PARTICULAR ITEM OR SOURCE HAD BEEN SUBJECTED TO THE PR ASSESSMENT WOULD INCLUDE, NOT ONLY THE SUBJECTING OF AN ITEM OR SOURCE TO TAX, BUT EQUALLY HOLDING THAT THE PARTICULAR SOURCE OR ITEM WAS NOT SUBJECTED TO TAX.' WE ARE OF THE OPINION THAT THE AFORESAID ITEM OR SOURC ASSESSMENT. MERELY BECAUSE THE ULTIMATE ORDER PASSED BY THE ASSESSING OFFICER IS SILENT ABOUT THIS ITEM AND THERE IS NO DISCUSSION THEREUPON WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THE SAME. IT IS ASSESSMENT ORDER LIKE A JUDGMENT OF THE COURT AND WOULD DISCUSS EACH AND EVERY ITEM AND ASPECTS SPECIFICALLY. IT IS CLEAR FROM THE RECORD THAT IMPORT AND IMPACT OF EVERY DOCUMENT SEIZED INC LUDING PAGE NO. 21 WAS CONSIDERED BY THE ASSESSING OFFICER; HE WENT INTO THE MATTER 15 THE UNITED PROVINCES SUGAR COMPANY LTD. THIS AGAIN WAS A JOINT VENTURE PROPOSAL BY GMS CONSTRUCTION CO. PVT. LTD. WITH MR. JEE FOR THE DEVELOPMENT OF PROPERTIES AT SHANTI NAGAR. THAT BOTH MR. JEETU AND GMS CONSTRUCTION CO. PVT. LTD, WERE TO INVEST AND SHARE THE PROFIT IN EQUAL PROPORTION AS STATED ON THE PAPER UNDER REFERENCE. ALL THE INITIAL PAYMENTS FOR THE PURCHASE OF LAND ERE MADE BY GMS CONSTRUCTION CO. PVT. LTD. AND NO CONTRIBUTION WAS RECEIVED FROM MR. JEETU. THIS JOINT VENTURE COULD NOT BE FINALIZED DUE TO THE SAME REASON AS STATE ABOVE I.E. RECESSION IN THE REAL ESTATE BUSINESS AND FALL IN THE MARKET PRICE OF THE PROPE ADVANCES MADE FOR SHANTI NAGAR PROPERTIES ARE NOT RELATED TO THE ASSESSEE AND HENCE TO HIS BLOCK ASSESSMENT.' THE ASSESSEE FURNISHED ITS COMMENTS TO THE SAID PAGE WHICH REFLECTED THE TRANSACTIONS RELATING TO PROPERTY PURCHASE AT R.T. NAGAR, SHAN TI NAGAR AND CHELLAGATTA ETC. IT IS THUS CLEAR THAT THIS VERY PROPERTY IN RESPECT OF WHICH ADDITIONS ARE MADE BY THE CIT(A) WAS THE SUBJECT MATTER OF CONSIDERATION BEFORE THE ASSESSING OFFICER. IT IS A DIFFERENT MATTER THAT AFTER THE REPLY ASSESSEE, THE ASSESSING OFFICER CHOSE NOT TO MAKE ANY ADDITION ON THIS COUNT AND NOTHING IS MENTIONED IN THE ASSESSMENT ORDER. THAT, HOWEVER, WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THIS MATTER. IT WAS IN OUR OPINION DULY CONSIDERED. MR. C.S. AGGARWAL, LEARNED SENIOR COUNSEL HAD SUBMITTED THAT AS PER THE JUDGMENTS OF THIS COURT IN UNION TYRES (SUPRA) AND SARDARI LAL & CO. (SUPRA), THE JURISDICTION OF THE FIRST APPELLATE AUTHORITY COULD EXERCISE HIS POWERS ONLY 'WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF THE ASSESSMENT. HIS SUBMISSION WAS THAT THERE WAS NO SUCH DETERMINATION. WE DO NOT AGREE WITH THIS SUBMISSION. OBVIOUSLY, WHEN THIS MATTER/ITEM IS CONSIDERED BUT ADDITION ON THAT ACCOUNT IS NOT MADE IN THE ASSESSMENT ORDER, IT WOULD CLEARLY FOLLOW THAT THE ASSESSING OFFICER HAD 'DETERMINED' THE S AME IN THE COURSE OF ASSESSMENT BY DECIDING NOT TO IN THE CASE OF SHAPOORJI PALLONJI MISTRY V. CIT [1958] 34 ITR 342 (BOM.) (WHICH HAS BEEN AFFIRMED BY THE SUPREME COURT), THE BOMBAY HIGH COURT CLARI FIED THAT 'SOURCE' OF INCOME WOULD NOT MEAN SOURCE IN THE SENSE OF HEAD OF INCOME AS USED IN THE INCOME WOULD MEAN A SPECIFIC SOURCE FROM WHICH A PARTICULAR INCOME SPANK OR AROSE. IT WAS CLARIFIED '.IF A PARTICULAR SOURCE OR ITEM OF IN COME HAD BEEN CONSIDERED BY THE INCOME OFFICER AND HAD BEEN SUBJECTED TO THE PROCESS OF ASSESSMENT, THEN EVEN THOUGH THE ASSESSEE MAY NOT HAVE APPEALED AGAINST THAT PARTICULAR SOURCE OR ITEM, ONE ONCE THE APPEAL WAS BEFORE THE APPELLATE ASSISTANT COMMI SSIONER HIS POWER EXTENDED NOT MERELY MATTER OF THE APPEAL, BUT TO THE WHOLE SUBJECT - MATTER OF ASSESSMENT. WHAT GAVE THE POWER TO THE APPELLATE ASSISTANT COMMISSIONER WAS THE FACT THAT A PARTICULAR ITEM OR SOURCE HAD BEEN SUBJECTED TO THE PR OCESS OF ASSESSMENT. NOW, THE PROCESS OF ASSESSMENT WOULD INCLUDE, NOT ONLY THE SUBJECTING OF AN ITEM OR SOURCE TO TAX, BUT EQUALLY HOLDING THAT THE PARTICULAR SOURCE OR ITEM WAS NOT SUBJECTED TO TAX.' WE ARE OF THE OPINION THAT THE AFORESAID ITEM OR SOURC E HAD BEEN SUBJECTED TO THE PROCESS OF ASSESSMENT. MERELY BECAUSE THE ULTIMATE ORDER PASSED BY THE ASSESSING OFFICER IS SILENT ABOUT THIS ITEM AND THERE IS NO DISCUSSION THEREUPON WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THE SAME. IT IS TRITE LAW THAT THE ASSESSING OFFICER IS NOT SUPPOSED TO FRAME THE ASSESSMENT ORDER LIKE A JUDGMENT OF THE COURT AND WOULD DISCUSS EACH AND EVERY ITEM AND ASPECTS SPECIFICALLY. IT IS CLEAR FROM THE RECORD THAT IMPORT AND IMPACT OF EVERY DOCUMENT LUDING PAGE NO. 21 WAS CONSIDERED BY THE ASSESSING OFFICER; HE WENT INTO THE MATTER ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. THIS AGAIN WAS A JOINT VENTURE PROPOSAL BY GMS CONSTRUCTION CO. PVT. LTD. WITH MR. JEE TU FOR THE DEVELOPMENT OF PROPERTIES AT SHANTI NAGAR. THAT BOTH MR. JEETU AND GMS CONSTRUCTION CO. PVT. LTD, WERE TO INVEST AND SHARE THE PROFIT IN EQUAL PROPORTION AS STATED ON THE PAPER UNDER REFERENCE. ALL THE INITIAL PAYMENTS FOR THE PURCHASE OF LAND ERE MADE BY GMS CONSTRUCTION CO. PVT. LTD. AND NO CONTRIBUTION WAS RECEIVED FROM MR. JEETU. THIS JOINT VENTURE COULD NOT BE FINALIZED DUE TO THE SAME REASON AS STATE ABOVE I.E. RECESSION IN THE REAL ESTATE BUSINESS AND FALL IN THE MARKET PRICE OF THE PROPE RTIES. THE ADVANCES MADE FOR SHANTI NAGAR PROPERTIES ARE NOT RELATED TO THE ASSESSEE AND HENCE TO THE ASSESSEE FURNISHED ITS COMMENTS TO THE SAID PAGE WHICH REFLECTED THE TRANSACTIONS RELATING TI NAGAR AND CHELLAGATTA ETC. IT IS THUS CLEAR THAT THIS VERY PROPERTY IN RESPECT OF WHICH ADDITIONS ARE MADE BY THE CIT(A) WAS THE SUBJECT MATTER OF CONSIDERATION BEFORE THE ASSESSING OFFICER. IT IS A DIFFERENT MATTER THAT AFTER THE REPLY ASSESSEE, THE ASSESSING OFFICER CHOSE NOT TO MAKE ANY ADDITION ON THIS COUNT AND NOTHING IS MENTIONED IN THE ASSESSMENT ORDER. THAT, HOWEVER, WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THIS MATTER. IT WAS IN OUR OPINION DULY CONSIDERED. MR. C.S. AGGARWAL, LEARNED SENIOR COUNSEL HAD SUBMITTED THAT AS PER THE JUDGMENTS OF THIS CO. (SUPRA), THE JURISDICTION OF THE FIRST APPELLATE AUTHORITY COULD EXERCISE HIS POWERS ONLY 'WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND DETERMINED IN THE COURSE OF THE ASSESSMENT. WE DO NOT AGREE WITH THIS SUBMISSION. OBVIOUSLY, WHEN THIS MATTER/ITEM IS CONSIDERED BUT ADDITION ON THAT ACCOUNT IS NOT MADE IN THE ASSESSMENT ORDER, IT WOULD CLEARLY FOLLOW THAT THE AME IN THE COURSE OF ASSESSMENT BY DECIDING NOT TO (BOM.) (WHICH HAS BEEN FIED THAT 'SOURCE' OF INCOME WOULD NOT MEAN SOURCE IN THE SENSE OF HEAD OF INCOME AS USED IN THE INCOME -TAX ACT BUT WOULD MEAN A SPECIFIC SOURCE FROM WHICH A PARTICULAR INCOME SPANK OR AROSE. IT WAS CLARIFIED COME HAD BEEN CONSIDERED BY THE INCOME -TAX OFFICER AND HAD BEEN SUBJECTED TO THE PROCESS OF ASSESSMENT, THEN EVEN THOUGH THE ASSESSEE MAY NOT HAVE APPEALED AGAINST THAT PARTICULAR SOURCE OR ITEM, ONE ONCE THE SSIONER HIS POWER EXTENDED NOT MERELY MATTER OF ASSESSMENT. WHAT GAVE THE POWER TO THE APPELLATE ASSISTANT COMMISSIONER WAS THE FACT THAT A PARTICULAR OCESS OF ASSESSMENT. NOW, THE PROCESS OF ASSESSMENT WOULD INCLUDE, NOT ONLY THE SUBJECTING OF AN ITEM OR SOURCE TO TAX, BUT EQUALLY E HAD BEEN SUBJECTED TO THE PROCESS OF ASSESSMENT. MERELY BECAUSE THE ULTIMATE ORDER PASSED BY THE ASSESSING OFFICER IS SILENT ABOUT THIS ITEM AND THERE IS NO DISCUSSION THEREUPON WOULD NOT MEAN THAT THE ASSESSING OFFICER HAD TRITE LAW THAT THE ASSESSING OFFICER IS NOT SUPPOSED TO FRAME THE ASSESSMENT ORDER LIKE A JUDGMENT OF THE COURT AND WOULD DISCUSS EACH AND EVERY ITEM AND ASPECTS SPECIFICALLY. IT IS CLEAR FROM THE RECORD THAT IMPORT AND IMPACT OF EVERY DOCUMENT LUDING PAGE NO. 21 WAS CONSIDERED BY THE ASSESSING OFFICER; HE WENT INTO THE MATTER BY ISSUING A QUESTIONNAIRE; CALLING UPON THE ASSESSEE TO GIVE REPLY AND REPLY/CLARIFICATION WAS RECEIVED FROM THE ASSESSEE. IT IS THEREAFTER ONLY THAT ADDITION ON THE BASIS NOT MADE IN RESPECT OF THE PROPERTIES IN QUESTION. 24. WE THUS ANSWER QUESTION NO. 2 IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE HOLDING THAT ON THE FACTS OF THIS CASE, THE CIT(A) RIGHTLY EXERCISED HIS POWERS UNDER SECTION 251(1) THE ACT. 25. IN VIEW OF OUR AFORESAID ANSWER TO QUESTION NO. 2, WE REVERT BACK TO THE ADDITIONS MENTIONED AT (IV) AND (V) UNDER QUESTION NO. 1, WHICH ARE NOW TO BE DEALT WITH ON MERITS. QUESTION NO. 1(IV): THE ENHANCEMENT OF ASSESSMENT OF UNDISCLOSED IN 25,00,000/ ON THE BASIS OF NOTINGS IN PAGE 21 OF ANNEXURE A 26. INSOFAR AS ADDITION OF THIS AMOUNT IS CONCERNED, IT IS POINTED OUT BY THE LEARNED CIT(A) THAT AT PAGE 21 OF THE SEIZED DOCUMENTS ITSELF IT WAS MENTIONED THAT RECEIPT OF RS. 25 LACS FROM MR. JITU VIRMANI WAS IN RESPECT OF PROPERTY AT RT NAGAR, BANGALORE. I 5.2.2000, MR. G.M. SINGH EXPLAINED THAT MR. JITU VIRMANI WAS TO GIVE RS. 50 LACS FOR JOINT VENTURE IN RESPECT OF THAT PROPERTY. HE HAD GIVEN RS. 25 LACS AND BALANCE WAS TO BE RECEIVED. THE CIT(A) FURTHER OBSERVED THAT IN HIS REPLY GIV ON 8TH FEBRUARY, 2002 HE MENTIONED THAT BALANCE AMOUNT OF RS. 25 LACS WAS NOT RECEIVED AND THAT AMOUNT HAS BEEN ADJUSTABLE AGAINST THE AMOUNT DUE TO MR. G.M. SINGH FROM SOLOMON DAVI HOLDING PVT. LTD. BEFORE T OF MR. JITU VIRMANI WAS NOT CORRECT AND THUS, ACCORDING TO THE CIT(A), THIS WAS NOT ONLY A CHANGE OF STAND BUT NOT ACCEPTABLE EITHER BECAUSE OF THE FOLLOWING REASONS: '1. ON PAGE 21 IT HAS BE EN CLEARLY MENTIONED THAT THE AMOUNT RECEIVABLE WAS RS. 50 LACS. 2. ON 8.2.02 IT WAS AGAIN CLEARLY EXPLAINED THAT 'THIS AMOUNT (THE BALANCE AMOUNT OF RS. 25 LAKHS) HAD BEEN ADJUSTED AGAINST THE AMOUNT DUE TO MR/MRS. G.M. SINGH FROM SOLOMAN DAVID HOLDING P. LTD.' IN VIEW OF THIS THE STAND OF THE APPELLANT NOW THAT THE ADDITIONAL AMOUNT OF RS. 25 LACS WAS NEITHER RECEIVED NOR ADJUSTED CANNOT BE ACCEPTED. THEREFORE THE ONLY CONCLUSION POSSIBLE FROM THESE FACTS IS THAT RS. 25 LACS WAS RECEIVED SEPARATELY AND HA S NOT BEEN REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. ACCORDINGLY, RS. 25 LACS IS TREATED AS UNACCOUNTED INCOME OF THE APPELLANT.' 27. THE LEARNED TRIBUNAL REVISITED THE ISSUE AGAIN DISCUSSING THE CONTENTS OF THE SEIZED DOCUMENTS AT PAGE 21 OF THE ANNEXURE EXPLANATION OF THE ASSESSEE. BEFORE THE ITAT, THE ASSESSEE HAD REITERATED HIS CONTENTION THAT MR. JITU VIRMANI PAID THE REMAINING BALANCE AMOUNT OF RS. 25 LACS IN CASH AND WAS NOT CORRECT AND DEALT WITH THE SAI D CONTENTION CONCLUDING ITS DISCUSSION AS UNDER: '42. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. IT IS AN ADMITTED FACT THAT THE SEIZED DOCUMENT HAS BEEN FOUND AS THE TIME OF SEARCH FROM THE PREMISES OF THE ASSESSEE AND WAS ALSO OWNED BY HIM. IN THE HANDS AND TAKE A DEFINITE STAND WHILE EXPLAINING THE NOTING ON THE SEIZED DOCUMENTS. BUT WE FIND THAT THE ASSESSEE IS CHANGING HIS STAND WHILE EXPLAINING THE NOTING ON THE SEIZED DOCUMENTS. BEFORE THE AO HIS EXPLANATION WAS THAT RS. 25,00,000 WAS ADJUSTED AGAINST THE AMOUNT DUE TO MR. & MRS. SINGH FROM M/S SOLOMON DAVID HOLDINGS PVT. LTD. AND BEFORE THE LD. CIT(A) THE EXPLANATION OF THE ASSESSEE WAS THAT THIS AMOUNT OF RS. 25,00,000/- WAS NEITHER RE 16 THE UNITED PROVINCES SUGAR COMPANY LTD. BY ISSUING A QUESTIONNAIRE; CALLING UPON THE ASSESSEE TO GIVE REPLY AND REPLY/CLARIFICATION WAS RECEIVED FROM THE ASSESSEE. IT IS THEREAFTER ONLY THAT ADDITION ON THE BASIS NOT MADE IN RESPECT OF THE PROPERTIES IN QUESTION. WE THUS ANSWER QUESTION NO. 2 IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE HOLDING THAT ON THE FACTS OF THIS CASE, THE CIT(A) RIGHTLY EXERCISED HIS POWERS UNDER SECTION 251(1) IN VIEW OF OUR AFORESAID ANSWER TO QUESTION NO. 2, WE REVERT BACK TO THE ADDITIONS MENTIONED AT (IV) AND (V) UNDER QUESTION NO. 1, WHICH ARE NOW TO BE DEALT WITH ON MERITS. THE ENHANCEMENT OF ASSESSMENT OF UNDISCLOSED IN COME OF ASSESSEE OF RS. 25,00,000/ - ON ACCOUNT OF PAYMENT ALLEGEDLY RECEIVED FROM JEETU VIRMANI ON THE BASIS OF NOTINGS IN PAGE 21 OF ANNEXURE A - 1 OF THE SEIZED DOCUMENTS. INSOFAR AS ADDITION OF THIS AMOUNT IS CONCERNED, IT IS POINTED OUT BY THE LEARNED CIT(A) THAT AT PAGE 21 OF THE SEIZED DOCUMENTS ITSELF IT WAS MENTIONED THAT RECEIPT OF RS. 25 LACS FROM MR. JITU VIRMANI WAS IN RESPECT OF PROPERTY AT RT NAGAR, BANGALORE. I N HIS STATEMENT DATED 5.2.2000, MR. G.M. SINGH EXPLAINED THAT MR. JITU VIRMANI WAS TO GIVE RS. 50 LACS FOR JOINT VENTURE IN RESPECT OF THAT PROPERTY. HE HAD GIVEN RS. 25 LACS AND BALANCE WAS TO BE RECEIVED. THE CIT(A) FURTHER OBSERVED THAT IN HIS REPLY GIV EN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ON 8TH FEBRUARY, 2002 HE MENTIONED THAT BALANCE AMOUNT OF RS. 25 LACS WAS NOT RECEIVED AND THAT AMOUNT HAS BEEN ADJUSTABLE AGAINST THE AMOUNT DUE TO MR. G.M. SINGH FROM SOLOMON DAVI HOLDING PVT. LTD. BEFORE T HE CIT(A), THE RESPONSE OF THE ASSESSEE WAS THAT THE ASSUMPTION OF MR. JITU VIRMANI WAS NOT CORRECT AND THUS, ACCORDING TO THE CIT(A), THIS WAS NOT ONLY A CHANGE OF STAND BUT NOT ACCEPTABLE EITHER BECAUSE OF THE FOLLOWING REASONS: EN CLEARLY MENTIONED THAT THE AMOUNT RECEIVABLE WAS RS. 50 LACS. 2. ON 8.2.02 IT WAS AGAIN CLEARLY EXPLAINED THAT 'THIS AMOUNT (THE BALANCE AMOUNT OF RS. 25 LAKHS) HAD BEEN ADJUSTED AGAINST THE AMOUNT DUE TO MR/MRS. G.M. SINGH FROM SOLOMAN LTD.' IN VIEW OF THIS THE STAND OF THE APPELLANT NOW THAT THE ADDITIONAL AMOUNT OF RS. 25 LACS WAS NEITHER RECEIVED NOR ADJUSTED CANNOT BE ACCEPTED. THEREFORE THE ONLY CONCLUSION POSSIBLE FROM THESE FACTS IS THAT RS. 25 LACS WAS RECEIVED SEPARATELY S NOT BEEN REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. ACCORDINGLY, RS. 25 LACS IS TREATED AS UNACCOUNTED INCOME OF THE APPELLANT.' THE LEARNED TRIBUNAL REVISITED THE ISSUE AGAIN DISCUSSING THE CONTENTS OF THE SEIZED DOCUMENTS AT PAGE 21 OF THE ANNEXURE A- 1, STATEMENT OF MR. G.M. SINGH AND ALSO THE EXPLANATION OF THE ASSESSEE. BEFORE THE ITAT, THE ASSESSEE HAD REITERATED HIS CONTENTION THAT MR. JITU VIRMANI PAID THE REMAINING BALANCE AMOUNT OF RS. 25 LACS IN CASH AND WAS NOT CORRECT D CONTENTION CONCLUDING ITS DISCUSSION AS UNDER: - '42. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. IT IS AN ADMITTED FACT THAT THE SEIZED DOCUMENT HAS BEEN FOUND AS THE TIME OF SEARCH FROM THE PREMISES OF THE ASSESSEE AND WAS ALSO OWNED BY HIM. IN THE LIGHT OF HIS FACT THE ASSESSEE SHOULD HAVE COME WITH CLEAR HANDS AND TAKE A DEFINITE STAND WHILE EXPLAINING THE NOTING ON THE SEIZED DOCUMENTS. BUT WE FIND THAT THE ASSESSEE IS CHANGING HIS STAND WHILE EXPLAINING THE NOTING ON THE SEIZED THE AO HIS EXPLANATION WAS THAT RS. 25,00,000 WAS ADJUSTED AGAINST THE AMOUNT DUE TO MR. & MRS. SINGH FROM M/S SOLOMON DAVID HOLDINGS PVT. LTD. AND BEFORE THE LD. CIT(A) THE EXPLANATION OF THE ASSESSEE WAS THAT THIS AMOUNT OF RS. WAS NEITHER RE CEIVED NOR ADJUSTED, IN SUCH A FACTUAL POSITION WE ARE NOT ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. BY ISSUING A QUESTIONNAIRE; CALLING UPON THE ASSESSEE TO GIVE REPLY AND REPLY/CLARIFICATION WAS RECEIVED FROM THE ASSESSEE. IT IS THEREAFTER ONLY THAT ADDITION ON THE BASIS OF PAGE NO. 21 WAS WE THUS ANSWER QUESTION NO. 2 IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE HOLDING THAT ON THE FACTS OF THIS CASE, THE CIT(A) RIGHTLY EXERCISED HIS POWERS UNDER SECTION 251(1) OF IN VIEW OF OUR AFORESAID ANSWER TO QUESTION NO. 2, WE REVERT BACK TO THE ADDITIONS MENTIONED AT (IV) AND (V) UNDER QUESTION NO. 1, WHICH ARE NOW TO BE DEALT WITH ON MERITS. COME OF ASSESSEE OF RS. ON ACCOUNT OF PAYMENT ALLEGEDLY RECEIVED FROM JEETU VIRMANI 1 OF THE SEIZED DOCUMENTS. INSOFAR AS ADDITION OF THIS AMOUNT IS CONCERNED, IT IS POINTED OUT BY THE LEARNED CIT(A) THAT AT PAGE 21 OF THE SEIZED DOCUMENTS ITSELF IT WAS MENTIONED THAT RECEIPT OF RS. 25 LACS FROM N HIS STATEMENT DATED 5.2.2000, MR. G.M. SINGH EXPLAINED THAT MR. JITU VIRMANI WAS TO GIVE RS. 50 LACS FOR JOINT VENTURE IN RESPECT OF THAT PROPERTY. HE HAD GIVEN RS. 25 LACS AND BALANCE WAS TO BE RECEIVED. EN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ON 8TH FEBRUARY, 2002 HE MENTIONED THAT BALANCE AMOUNT OF RS. 25 LACS WAS NOT RECEIVED AND THAT AMOUNT HAS BEEN ADJUSTABLE AGAINST THE AMOUNT DUE TO MR. G.M. SINGH FROM SOLOMON HE CIT(A), THE RESPONSE OF THE ASSESSEE WAS THAT THE ASSUMPTION OF MR. JITU VIRMANI WAS NOT CORRECT AND THUS, ACCORDING TO THE CIT(A), THIS WAS NOT ONLY A CHANGE OF STAND BUT NOT ACCEPTABLE EITHER BECAUSE OF THE FOLLOWING REASONS: - EN CLEARLY MENTIONED THAT THE AMOUNT RECEIVABLE WAS RS. 50 LACS. 2. ON 8.2.02 IT WAS AGAIN CLEARLY EXPLAINED THAT 'THIS AMOUNT (THE BALANCE AMOUNT OF RS. 25 LAKHS) HAD BEEN ADJUSTED AGAINST THE AMOUNT DUE TO MR/MRS. G.M. SINGH FROM SOLOMAN LTD.' IN VIEW OF THIS THE STAND OF THE APPELLANT NOW THAT THE ADDITIONAL AMOUNT OF RS. 25 LACS WAS NEITHER RECEIVED NOR ADJUSTED CANNOT BE ACCEPTED. THEREFORE THE ONLY CONCLUSION POSSIBLE FROM THESE FACTS IS THAT RS. 25 LACS WAS RECEIVED SEPARATELY S NOT BEEN REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. ACCORDINGLY, RS. 25 LACS IS THE LEARNED TRIBUNAL REVISITED THE ISSUE AGAIN DISCUSSING THE CONTENTS OF THE SEIZED 1, STATEMENT OF MR. G.M. SINGH AND ALSO THE EXPLANATION OF THE ASSESSEE. BEFORE THE ITAT, THE ASSESSEE HAD REITERATED HIS CONTENTION THAT MR. JITU VIRMANI PAID THE REMAINING BALANCE AMOUNT OF RS. 25 LACS IN CASH AND WAS NOT CORRECT '42. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. IT IS AN ADMITTED FACT THAT THE SEIZED DOCUMENT HAS BEEN FOUND AS THE TIME OF SEARCH FROM THE PREMISES OF THE ASSESSEE AND LIGHT OF HIS FACT THE ASSESSEE SHOULD HAVE COME WITH CLEAR HANDS AND TAKE A DEFINITE STAND WHILE EXPLAINING THE NOTING ON THE SEIZED DOCUMENTS. BUT WE FIND THAT THE ASSESSEE IS CHANGING HIS STAND WHILE EXPLAINING THE NOTING ON THE SEIZED THE AO HIS EXPLANATION WAS THAT RS. 25,00,000 WAS ADJUSTED AGAINST THE AMOUNT DUE TO MR. & MRS. SINGH FROM M/S SOLOMON DAVID HOLDINGS PVT. LTD. AND BEFORE THE LD. CIT(A) THE EXPLANATION OF THE ASSESSEE WAS THAT THIS AMOUNT OF RS. CEIVED NOR ADJUSTED, IN SUCH A FACTUAL POSITION WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. THIS GROUND OF THE ASSESSEE IS ALSO DISMISSED.' 28. WE ARE OF THE OPINION THAT MR. SABHARWAL, LEARNED COUNSEL APPEARING FOR THE CORRECT IN HIS SUBMISSION THAT ISSUE PERTAINS TO THE APPRECIATION OF EVIDENCE BY THE TWO AUTHORITIES BELOW. 29. IN ARADHNA OIL MILLS V. CIT [2001] CATEGORICALLY HELD THAT IT WAS NOT FOR THE HIGH COURTS TO EXERCISE ITS POWER UNDER SECTION 260A OF THE ACT RELYING THE EVIDENCE. THAT CASE ALSO RELATED TO SEARCH AND SEIZURE AND ON THE BASIS OF DOCUMENTS SEIZED ADDITION WAS MADE BY THE ITO WHICH WAS UPHELD BY THE TRIBUNAL A THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE QUASI DISMISSING THE APPEAL OF THE ASSESSEE, THE COURT OBSERVED: 'IN EFFECT, THE QUESTION WHETHER A PARTICULAR ENTRY IN THE ACCOUNT BOOK IS GENUINE OR NOT, OR WHETHER THE ASSESSEE IS ABLE TO SHOW ITS SOURCE IS A QUESTION OF FACT. IN OTHER WORDS, IT ONLY INVOLVES APPRECIATION OF EVIDENCE TENDERED BY THE ASSESSEE PURSUANT TO A QUERY MADE BY THE REVENUE. IT IS FOR THE ASSESSING OFFICER TO ACCEPT THE EXPLANATION OFFERED OR NOT. NO DOUBT, THE FIRST APPELLATE COURT AS ALSO THE SECOND APPELLATE COURT ARE ALSO EMPOWERED TO EXAMINE THE FACTUAL BACKGROUND OF THE ISSUE WITH A VIEW TO EXAMINE WHETHER THE EXPLANATION OFFERED IS RELIABLE, ADEQUATE OR/AND PROPER. BUT THAT EXERCISE, TH E HIGH COURT IN ITS THIRD APPELLATE JURISDICTION CANNOT DO BY VIRTUE OF THE SPECIFIC LANGUAGE EMPLOYED IN SECTION 260A OF THE ACT.' 30. IN A RECENT JUDGMENT PRONOUNCED BY THE SUPREME COURT IN THE CASE OF CIT V. P. MOHANAKALA [2007] 291 ITR AND AFFIRMED BY MAKING FOLLOWING PERTINENT OBSERVATIONS: 'THE FINDINGS OF FACT ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PROPER APP RECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUMSTANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER IN WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE BEEN DULY TAKEN INTO CONSIDERATION BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONE. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. NO QUESTION O F LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW HAD ARISEN FOR CONSIDERATION OF THE HIGH COURT. THE HIGH COURT MISDIRECTED ITSELF AND COMMITTED ERROR IN DISTURBING THE CONCURRENT FINDINGS OF FACTS.' 31. IT CANNOT BE SAID THAT THE FINDINGS ARE IN ANY WAY PE ADDITION IS, THEREFORE, SUSTAINED. QUESTION NO. 1(V) THE ENHANCEMENT OF ASSESSMENT OF AN ALLEGED UNDISCLOSED INCOME OF ASSESSEE OF RS. 1,05,00,000 BACK IN RESPECT OF TRANSACTIONS OF CHELLEGATA PROPERTY ON THE BASIS OF NOTINGS IN PAGE 21 OF ANNEXURE A 32. INSOFAR AS ADDITION OF RS. 1.05 CRORES IS CONCERNED, IT PERTAINS TO WAS AGAIN A JOINT VENTURE BETWEEN THE ASSESSEE AND JITU VIRMANI. FROM THE SEIZED DOCUMENTS IT WAS FOUND THAT THE AMOUNT OF RS. 1,35,80,000 WAS INVESTED IN THE SAID PROPERTIES. THIS AMOUNT WAS PAID ON BEHALF OF 'SOLEMAN DAVID PRIVAT WAS THAT THESE AMOUNTS WERE SUBSEQUENTLY RECEIVED AND STATEMENT OF ACCOUNT WAS PRODUCED. 17 THE UNITED PROVINCES SUGAR COMPANY LTD. INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. THIS GROUND OF THE ASSESSEE IS ALSO DISMISSED.' WE ARE OF THE OPINION THAT MR. SABHARWAL, LEARNED COUNSEL APPEARING FOR THE CORRECT IN HIS SUBMISSION THAT ISSUE PERTAINS TO THE APPRECIATION OF EVIDENCE BY THE TWO IN ARADHNA OIL MILLS V. CIT [2001] 119 TAXMAN 629 THE MADHYA PRADESH HIGH COURT THAT IT WAS NOT FOR THE HIGH COURTS TO EXERCISE ITS POWER UNDER SECTION 260A OF THE ACT RELYING THE EVIDENCE. THAT CASE ALSO RELATED TO SEARCH AND SEIZURE AND ON THE BASIS OF DOCUMENTS SEIZED ADDITION WAS MADE BY THE ITO WHICH WAS UPHELD BY THE TRIBUNAL A THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE QUASI - JUDICIAL AUTHORITIES AND DISMISSING THE APPEAL OF THE ASSESSEE, THE COURT OBSERVED: - 'IN EFFECT, THE QUESTION WHETHER A PARTICULAR ENTRY IN THE ACCOUNT BOOK IS GENUINE OR NOT, THE ASSESSEE IS ABLE TO SHOW ITS SOURCE IS A QUESTION OF FACT. IN OTHER WORDS, IT ONLY INVOLVES APPRECIATION OF EVIDENCE TENDERED BY THE ASSESSEE PURSUANT TO A QUERY MADE BY THE REVENUE. IT IS FOR THE ASSESSING OFFICER TO ACCEPT THE EXPLANATION OFFERED OR NOT. NO DOUBT, THE FIRST APPELLATE COURT AS ALSO THE SECOND APPELLATE COURT ARE ALSO EMPOWERED TO EXAMINE THE FACTUAL BACKGROUND OF THE ISSUE WITH A VIEW TO EXAMINE WHETHER THE EXPLANATION OFFERED IS RELIABLE, ADEQUATE OR/AND PROPER. E HIGH COURT IN ITS THIRD APPELLATE JURISDICTION CANNOT DO BY VIRTUE OF THE SPECIFIC LANGUAGE EMPLOYED IN SECTION 260A OF THE ACT.' IN A RECENT JUDGMENT PRONOUNCED BY THE SUPREME COURT IN THE CASE OF CIT V. P. ITR 278 / 161 TAXMAN 169 THIS WELL ESTABLISHED PRINCIPLE IS REITERATED AND AFFIRMED BY MAKING FOLLOWING PERTINENT OBSERVATIONS: - 'THE FINDINGS OF FACT ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PROPER RECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUMSTANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER IN WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE BEEN DULY INTO CONSIDERATION BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONE. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. F LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW HAD ARISEN FOR CONSIDERATION OF THE HIGH COURT. THE HIGH COURT MISDIRECTED ITSELF AND COMMITTED ERROR IN DISTURBING THE CONCURRENT FINDINGS OF FACTS.' IT CANNOT BE SAID THAT THE FINDINGS ARE IN ANY WAY PE RVERSE OR BASED UPON NO EVIDENCE THIS ADDITION IS, THEREFORE, SUSTAINED. THE ENHANCEMENT OF ASSESSMENT OF AN ALLEGED UNDISCLOSED INCOME OF ASSESSEE OF RS. 1,05,00,000 /- ON ACCOUNT OF AN ALLEGED PAYMENT RECEIVED BACK IN RESPECT OF TRANSACTIONS OF CHELLEGATA PROPERTY ON THE BASIS OF NOTINGS IN PAGE 21 OF ANNEXURE A -1 OF THE SEIZED DOCUMENTS. INSOFAR AS ADDITION OF RS. 1.05 CRORES IS CONCERNED, IT PERTAINS TO CHELLAGATTA PROPERTY. IT WAS AGAIN A JOINT VENTURE BETWEEN THE ASSESSEE AND JITU VIRMANI. FROM THE SEIZED DOCUMENTS IT WAS FOUND THAT THE AMOUNT OF RS. 1,35,80,000 WAS INVESTED IN THE SAID PROPERTIES. THIS AMOUNT WAS PAID ON BEHALF OF 'SOLEMAN DAVID PRIVAT E LTD'. THE EXPLANATION OF THE ASSESSEE WAS THAT THESE AMOUNTS WERE SUBSEQUENTLY RECEIVED AND STATEMENT OF ACCOUNT WAS PRODUCED. ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. THIS GROUND OF THE WE ARE OF THE OPINION THAT MR. SABHARWAL, LEARNED COUNSEL APPEARING FOR THE REVENUE IS CORRECT IN HIS SUBMISSION THAT ISSUE PERTAINS TO THE APPRECIATION OF EVIDENCE BY THE TWO THE MADHYA PRADESH HIGH COURT THAT IT WAS NOT FOR THE HIGH COURTS TO EXERCISE ITS POWER UNDER SECTION 260A OF THE ACT RELYING THE EVIDENCE. THAT CASE ALSO RELATED TO SEARCH AND SEIZURE AND ON THE BASIS OF DOCUMENTS SEIZED ADDITION WAS MADE BY THE ITO WHICH WAS UPHELD BY THE TRIBUNAL A S WELL. JUDICIAL AUTHORITIES AND 'IN EFFECT, THE QUESTION WHETHER A PARTICULAR ENTRY IN THE ACCOUNT BOOK IS GENUINE OR NOT, THE ASSESSEE IS ABLE TO SHOW ITS SOURCE IS A QUESTION OF FACT. IN OTHER WORDS, IT ONLY INVOLVES APPRECIATION OF EVIDENCE TENDERED BY THE ASSESSEE PURSUANT TO A QUERY MADE BY THE REVENUE. IT IS FOR THE ASSESSING OFFICER TO ACCEPT THE EXPLANATION OFFERED OR NOT. NO DOUBT, THE FIRST APPELLATE COURT AS ALSO THE SECOND APPELLATE COURT ARE ALSO EMPOWERED TO EXAMINE THE FACTUAL BACKGROUND OF THE ISSUE WITH A VIEW TO EXAMINE E HIGH COURT IN ITS THIRD APPELLATE JURISDICTION CANNOT DO BY VIRTUE OF IN A RECENT JUDGMENT PRONOUNCED BY THE SUPREME COURT IN THE CASE OF CIT V. P. THIS WELL ESTABLISHED PRINCIPLE IS REITERATED 'THE FINDINGS OF FACT ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PROPER RECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUMSTANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER IN WHICH THE SUMS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAVE BEEN DULY INTO CONSIDERATION BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONE. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID THROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE. F LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW HAD ARISEN FOR CONSIDERATION OF THE HIGH COURT. THE HIGH COURT MISDIRECTED ITSELF AND COMMITTED ERROR RVERSE OR BASED UPON NO EVIDENCE THIS THE ENHANCEMENT OF ASSESSMENT OF AN ALLEGED UNDISCLOSED INCOME OF ON ACCOUNT OF AN ALLEGED PAYMENT RECEIVED BACK IN RESPECT OF TRANSACTIONS OF CHELLEGATA PROPERTY ON THE BASIS OF CHELLAGATTA PROPERTY. IT WAS AGAIN A JOINT VENTURE BETWEEN THE ASSESSEE AND JITU VIRMANI. FROM THE SEIZED DOCUMENTS IT WAS FOUND THAT THE AMOUNT OF RS. 1,35,80,000 WAS INVESTED IN THE SAID PROPERTIES. THIS E LTD'. THE EXPLANATION OF THE ASSESSEE WAS THAT THESE AMOUNTS WERE SUBSEQUENTLY RECEIVED AND STATEMENT OF ACCOUNT WAS PRODUCED. AS PER THE CIT(A), THE DATES ON WHICH THE AMOUNTS WERE ADVANCED AND THE AMOUNTS WERE RECEIVED BACK COULD NOT BE RELATED TO SEIZ 'I. THE DOCUMENTS RECORD 'RECD. 1.05 CRORES + 35 CHQ. ON 4.9.95'. THIS NOTING CANNOT BE BROKEN UP IN TWO PARTS WHEN THE NOTHINGS HAVE BEEN MAD THAT ON 4.9.95 ITSELF BOTH AMOUNT OF RS. 1.05 CRORES AND RS. 35 LACS WERE RECEIVED. IT CANNOT BE SAID THAT RS. 1.05 CRORES WERE RECEIVED AFTER 4.9.95 BUT SH. G.M. SINGH RECORDED THE SAME ON THE DATE OF HIMSELF ONLY BY SAYING THAT ON 4.9.95 RS. 1.05 CRORES WAS NOT RECEIVED EVEN THOUGH THIS IS RECORDED AS SUCH. II. IN HIS FIRST STATEMENT GIVEN ON 5.2.2000 SH. G.M. SINGH HAD ALSO STATED THAT RS. 1.35 WERE ALREADY INVESTED. THEREFORE, IT WAS NOT OPEN FOR HIM TO CHANGE HIS STAND THAT THIS AMOUNT WAS ADVANCED IN THE YEAR 1996 AS PER THE STATEMENT OF ACCOUNTS GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS.' THE CIT(A) FURTHER FOUND AS UNDER: '( F) THE NOTINGS MENTIONED TWO AMOUNTS OF RS. 1.05 CRORES AND RS. 35 LACS WHEREAS THE EXPLANATION GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS MENTIONED TWO DIFFERENT AMOUNTS I.E. RS. 67.81 LACS FOR SH. G.M. SINGH AND RS. 67.86 LACS FOR MRS. PRAVEEN NIN DRAJOG. THERE IS NO CORRELATION BETWEEN THESE TWO SETS OF FIGURES AND THE EXPLANATION GIVEN CANNOT EXPLAIN THE NOTINGS ON PAGE 21. (G) AS SH. G.M. SINGH HAD CONFIRMED THAT RS. 1.35 CRORES WERE ALREADY INVESTED, IT IS LOGICAL TO BELIEVE THE WRITINGS ON PAGE 4.9.95, AFTER THE DEAL WAS NOT FINALIZED. 13.6 ON THE BASIS OF ABOVE MENTIONED FACTS AND ANALYSIS OF THE SAME THE CONCLUSION THAT CAN BE ARRIVED AT IS THAT THE DEAL IN THIS PROPERTY WAS MADE IN THE YEAR 1995 AN APPROXIMATELY RS. 1.35 CRORES WERE PAID TO DIFFERENT PERSONS THROUGH SH. JEETU VIRMANI. THE DEAL DID NOT MATERIALIZE SUBSEQUENTLY AND THE AMOUNT GIVEN WAS RECEIVED BACK ON 4.9.95 RS. 35 LACS WERE RECEIVED IN CHEQUE AND RS. 105 CRORES WERE RECEIVED BACK I WHICH WAS NOT ACCOUNTED FOR. ALL EXPLANATIONS OFFERED SUBSEQUENTLY ARE AFTERTHOUGHT. ACCORDINGLY RS. 1.05 CRORES WILL BE TREATED AS INCOME OF SH. G.M. SINGH.' 33. THE ITAT THOROUGHLY RECONSIDERED THIS MATTER AS WELL IN THE LIGHT OF EXPLANATION OF TH ASSESSEE. THE TRIBUNAL HAS REPRODUCED THE DISCREPANCY POINTED OUT BY THE CIT(A) IN THE EXPLANATION FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER VIDE HIS SHOW CAUSE NOTICE AND THE REPLY THERETO BY THE ASSESSEE AS WELL AS THE FINDINGS OF THE CIT( FURTHER POINTED OUT THAT NOTINGS AT PAGE 21 WERE IN THE HAND WRITING OF THE ASSESSEE. IN HIS STATEMENT DATED 5.2.2000 THE ASSESSEE CONFIRMED THAT THESE NOTINGS RELATED TO CHELLAGATTA PROPERTY. ON THE BASIS OF ADMITTED POSITION AND ANALYSIS AGREED WITH THE FINDINGS OF THE CIT(A). HAVING REGARD TO THE DISCUSSION WHILE CONSIDERING ITEM (IV) PERTAINING TO ADDITION OF RS. 25 LACS ABOVE, WE ARE OF THE VIEW THAT THERE IS NO PERVERSITY IN THE FINDINGS OF THE TWO AUTH LEARNED SENIOR COUNSEL APPEARING FOR THE APPELLANT BEFORE US, AGAIN, WAS THE SAME WHICH WAS PRESSED BEFORE THE AUTHORITIES BELOW. IT WAS SOUGHT TO BE HIGHLIGHTED THAT MAJOR PORTION OF THE AM OUNT NAMELY RS. 70 LACS OUT OF RS. 1.35 CRORES WAS RECEIVED BEFORE THE DATE OF SEARCH AND THERE WAS NO MATERIAL TO ASSUME THAT THE AMOUNT OF RS. 1.05 CRORES WAS RECEIVED IN CASH. HOWEVER, THE TWO AUTHORITIES BELOW HAVE FOUND, AS A FACT, THAT THE AMOUNT OF ALLEGEDLY RECEIVED COULD NOT BE RELATED TO THE TRANSACTION IN QUESTION. 18 THE UNITED PROVINCES SUGAR COMPANY LTD. AS PER THE CIT(A), THE DATES ON WHICH THE AMOUNTS WERE ADVANCED AND THE AMOUNTS WERE RECEIVED BACK COULD NOT BE RELATED TO SEIZ ED DOCUMENTS AT ALL FOR THE FOLLOWING REASONS: 'I. THE DOCUMENTS RECORD 'RECD. 1.05 CRORES + 35 CHQ. ON 4.9.95'. THIS NOTING CANNOT BE BROKEN UP IN TWO PARTS - ONE FOR RS. 35 LACS AND OTHER FOR RS. 1.05 CRORES, PARTICULARLY WHEN THE NOTHINGS HAVE BEEN MAD E IN THE PAST TENSE, I.E. SH. G.M. SINGH HAS RECORDED THAT ON 4.9.95 ITSELF BOTH AMOUNT OF RS. 1.05 CRORES AND RS. 35 LACS WERE RECEIVED. IT CANNOT BE SAID THAT RS. 1.05 CRORES WERE RECEIVED AFTER 4.9.95 BUT SH. G.M. SINGH RECORDED THE SAME ON THE DATE OF RECEIPT OF RS. 35 LACS. THE APPELLANT IS TRYING TO DEFEND HIMSELF ONLY BY SAYING THAT ON 4.9.95 RS. 1.05 CRORES WAS NOT RECEIVED EVEN THOUGH THIS IS II. IN HIS FIRST STATEMENT GIVEN ON 5.2.2000 SH. G.M. SINGH HAD ALSO STATED THAT RS. 1.35 WERE ALREADY INVESTED. THEREFORE, IT WAS NOT OPEN FOR HIM TO CHANGE HIS STAND THAT THIS AMOUNT WAS ADVANCED IN THE YEAR 1996 AS PER THE STATEMENT OF ACCOUNTS GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS.' THE CIT(A) FURTHER FOUND AS UNDER: - F) THE NOTINGS MENTIONED TWO AMOUNTS OF RS. 1.05 CRORES AND RS. 35 LACS WHEREAS THE EXPLANATION GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS MENTIONED TWO DIFFERENT AMOUNTS I.E. RS. 67.81 LACS FOR SH. G.M. SINGH AND RS. 67.86 LACS FOR MRS. PRAVEEN DRAJOG. THERE IS NO CORRELATION BETWEEN THESE TWO SETS OF FIGURES AND THE EXPLANATION GIVEN CANNOT EXPLAIN THE NOTINGS ON PAGE 21. (G) AS SH. G.M. SINGH HAD CONFIRMED THAT RS. 1.35 CRORES WERE ALREADY INVESTED, IT IS LOGICAL TO BELIEVE THE WRITINGS ON PAGE 21 THAT THE SAME AMOUNT WAS RECEIVED BACK ON 4.9.95, AFTER THE DEAL WAS NOT FINALIZED. 13.6 ON THE BASIS OF ABOVE MENTIONED FACTS AND ANALYSIS OF THE SAME THE CONCLUSION THAT CAN BE ARRIVED AT IS THAT THE DEAL IN THIS PROPERTY WAS MADE IN THE YEAR 1995 AN APPROXIMATELY RS. 1.35 CRORES WERE PAID TO DIFFERENT PERSONS THROUGH SH. JEETU VIRMANI. THE DEAL DID NOT MATERIALIZE SUBSEQUENTLY AND THE AMOUNT GIVEN WAS RECEIVED BACK ON 4.9.95 RS. 35 LACS WERE RECEIVED IN CHEQUE AND RS. 105 CRORES WERE RECEIVED BACK I WHICH WAS NOT ACCOUNTED FOR. ALL EXPLANATIONS OFFERED SUBSEQUENTLY ARE AFTERTHOUGHT. ACCORDINGLY RS. 1.05 CRORES WILL BE TREATED AS INCOME OF SH. G.M. SINGH.' THE ITAT THOROUGHLY RECONSIDERED THIS MATTER AS WELL IN THE LIGHT OF EXPLANATION OF TH ASSESSEE. THE TRIBUNAL HAS REPRODUCED THE DISCREPANCY POINTED OUT BY THE CIT(A) IN THE EXPLANATION FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER VIDE HIS SHOW CAUSE NOTICE AND THE REPLY THERETO BY THE ASSESSEE AS WELL AS THE FINDINGS OF THE CIT( FURTHER POINTED OUT THAT NOTINGS AT PAGE 21 WERE IN THE HAND WRITING OF THE ASSESSEE. IN HIS STATEMENT DATED 5.2.2000 THE ASSESSEE CONFIRMED THAT THESE NOTINGS RELATED TO CHELLAGATTA PROPERTY. ON THE BASIS OF ADMITTED POSITION AND ANALYSIS DONE BY THE CIT(A) THE TRIBUNAL AGREED WITH THE FINDINGS OF THE CIT(A). HAVING REGARD TO THE DISCUSSION WHILE CONSIDERING ITEM (IV) PERTAINING TO ADDITION OF RS. 25 LACS ABOVE, WE ARE OF THE VIEW THAT THERE IS NO PERVERSITY IN THE FINDINGS OF THE TWO AUTH ORITIES BELOW WHICH ARE FACTUAL IN NATURE. THE SUBMISSIONS OF THE LEARNED SENIOR COUNSEL APPEARING FOR THE APPELLANT BEFORE US, AGAIN, WAS THE SAME WHICH WAS PRESSED BEFORE THE AUTHORITIES BELOW. IT WAS SOUGHT TO BE HIGHLIGHTED THAT MAJOR PORTION OF THE OUNT NAMELY RS. 70 LACS OUT OF RS. 1.35 CRORES WAS RECEIVED BEFORE THE DATE OF SEARCH AND THERE WAS NO MATERIAL TO ASSUME THAT THE AMOUNT OF RS. 1.05 CRORES WAS RECEIVED IN CASH. HOWEVER, THE TWO AUTHORITIES BELOW HAVE FOUND, AS A FACT, THAT THE AMOUNT OF ALLEGEDLY RECEIVED COULD NOT BE RELATED TO THE TRANSACTION IN QUESTION. ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. AS PER THE CIT(A), THE DATES ON WHICH THE AMOUNTS WERE ADVANCED AND THE AMOUNTS WERE ED DOCUMENTS AT ALL FOR THE FOLLOWING REASONS: - 'I. THE DOCUMENTS RECORD 'RECD. 1.05 CRORES + 35 CHQ. ON 4.9.95'. THIS NOTING CANNOT BE ONE FOR RS. 35 LACS AND OTHER FOR RS. 1.05 CRORES, PARTICULARLY E IN THE PAST TENSE, I.E. SH. G.M. SINGH HAS RECORDED THAT ON 4.9.95 ITSELF BOTH AMOUNT OF RS. 1.05 CRORES AND RS. 35 LACS WERE RECEIVED. IT CANNOT BE SAID THAT RS. 1.05 CRORES WERE RECEIVED AFTER 4.9.95 BUT SH. G.M. SINGH RECEIPT OF RS. 35 LACS. THE APPELLANT IS TRYING TO DEFEND HIMSELF ONLY BY SAYING THAT ON 4.9.95 RS. 1.05 CRORES WAS NOT RECEIVED EVEN THOUGH THIS IS II. IN HIS FIRST STATEMENT GIVEN ON 5.2.2000 SH. G.M. SINGH HAD ALSO STATED THAT RS. 1.35 CRORES WERE ALREADY INVESTED. THEREFORE, IT WAS NOT OPEN FOR HIM TO CHANGE HIS STAND THAT THIS AMOUNT WAS ADVANCED IN THE YEAR 1996 AS PER THE STATEMENT OF ACCOUNTS GIVEN DURING F) THE NOTINGS MENTIONED TWO AMOUNTS OF RS. 1.05 CRORES AND RS. 35 LACS WHEREAS THE EXPLANATION GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS MENTIONED TWO DIFFERENT AMOUNTS I.E. RS. 67.81 LACS FOR SH. G.M. SINGH AND RS. 67.86 LACS FOR MRS. PRAVEEN DRAJOG. THERE IS NO CORRELATION BETWEEN THESE TWO SETS OF FIGURES AND THE EXPLANATION (G) AS SH. G.M. SINGH HAD CONFIRMED THAT RS. 1.35 CRORES WERE ALREADY INVESTED, IT IS 21 THAT THE SAME AMOUNT WAS RECEIVED BACK ON 13.6 ON THE BASIS OF ABOVE MENTIONED FACTS AND ANALYSIS OF THE SAME THE CONCLUSION THAT CAN BE ARRIVED AT IS THAT THE DEAL IN THIS PROPERTY WAS MADE IN THE YEAR 1995 AN D APPROXIMATELY RS. 1.35 CRORES WERE PAID TO DIFFERENT PERSONS THROUGH SH. JEETU VIRMANI. THE DEAL DID NOT MATERIALIZE SUBSEQUENTLY AND THE AMOUNT GIVEN WAS RECEIVED BACK ON 4.9.95 RS. 35 LACS WERE RECEIVED IN CHEQUE AND RS. 105 CRORES WERE RECEIVED BACK I N CASH WHICH WAS NOT ACCOUNTED FOR. ALL EXPLANATIONS OFFERED SUBSEQUENTLY ARE AFTERTHOUGHT. ACCORDINGLY RS. 1.05 CRORES WILL BE TREATED AS INCOME OF SH. G.M. SINGH.' THE ITAT THOROUGHLY RECONSIDERED THIS MATTER AS WELL IN THE LIGHT OF EXPLANATION OF TH E ASSESSEE. THE TRIBUNAL HAS REPRODUCED THE DISCREPANCY POINTED OUT BY THE CIT(A) IN THE EXPLANATION FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER VIDE HIS SHOW CAUSE NOTICE AND THE REPLY THERETO BY THE ASSESSEE AS WELL AS THE FINDINGS OF THE CIT( A). THE TRIBUNAL FURTHER POINTED OUT THAT NOTINGS AT PAGE 21 WERE IN THE HAND WRITING OF THE ASSESSEE. IN HIS STATEMENT DATED 5.2.2000 THE ASSESSEE CONFIRMED THAT THESE NOTINGS RELATED TO CHELLAGATTA DONE BY THE CIT(A) THE TRIBUNAL AGREED WITH THE FINDINGS OF THE CIT(A). HAVING REGARD TO THE DISCUSSION WHILE CONSIDERING ITEM (IV) PERTAINING TO ADDITION OF RS. 25 LACS ABOVE, WE ARE OF THE VIEW THAT THERE IS NO PERVERSITY IN ORITIES BELOW WHICH ARE FACTUAL IN NATURE. THE SUBMISSIONS OF THE LEARNED SENIOR COUNSEL APPEARING FOR THE APPELLANT BEFORE US, AGAIN, WAS THE SAME WHICH WAS PRESSED BEFORE THE AUTHORITIES BELOW. IT WAS SOUGHT TO BE HIGHLIGHTED THAT MAJOR PORTION OF THE OUNT NAMELY RS. 70 LACS OUT OF RS. 1.35 CRORES WAS RECEIVED BEFORE THE DATE OF SEARCH AND THERE WAS NO MATERIAL TO ASSUME THAT THE AMOUNT OF RS. 1.05 CRORES WAS RECEIVED IN CASH. HOWEVER, THE TWO AUTHORITIES BELOW HAVE FOUND, AS A FACT, THAT THE AMOUNT OF RS. 70 LACS 34. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION FOR INTERFERING WITH THIS FINDING AS WELL. WITH THIS QUESTION NO. 3 ALSO STANDS ANSWERED AGAINST THE ASSESSEE. 35. AS A RES ULT THE APPEAL WARRANTS TO BE DISMISSED WHICH IS DISMISSED. 9. A PERUSAL OF THE PROPOSITIONS OF LAW LAID DOWN IN ALL THESE CASE CONCLUSION THAT THE LD. CIT(A) CANNOT TOUCH FROM THE ORDER OF ASSESSMENT AND A SUBJECT MATTER THE ORDER OF THE ASSESSMENT. IN THE CASE ON HAND, THE ISSUE OF COMPUTATION OF BOOK PROFITS U/S 115JB OF THE ACT WAS NOT MATTER DURING THE CO URSE OF ASSESSMENT PROCEEDINGS PROFITS U/S 115JB OF THE ACT, 115JB OF THE ACT, IS A SELF CONTAINED CODE 09/11/2001 AND WAS OUTSIDE THE SCOPE OF THE ORDER OF ASSESSMENT PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT ON 21/12/2015. EMPOWERED TO ENHANCE THE ASSESSMENT BY COMPUTING BOOK PROFITS U/S 115JB OF THE ACT, AS IT IS A SEPARATE CODE. THUS, WE UPHOLD THIS CONTENTION OF THE ASSESSEE AND ADJUDICATE THIS ISSUE ON POWERS OF ENHANCEMENT OF THE CIT(A), ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN FAVOUR OF THE ASSESSEE. 10. COMING TO THE ISSUE ON MERITS, WE FIND THAT THE LD. CIT(A) WHILE DISPOSING OFF THE MATT ER FOR THE ASSESSMENT YEAR FOLLOWS:- 13. GROUND NO. 5, 6 & 7 ARE RELATING TO MAT ON BOOK PROFIT UNDER SECTION 115JB 14. AS PER THE AR THE AO WAS WRONG IN HOLDING THAT SECTION 115JB WAS APPLICABLE IN THE CASE OF THE ASSESSEE AND WAS ALSO WRONG IN COMPUTING BOOK PROFIT AND TAX U/S. 115JB WHEN THERE WAS NO COMPUTATION OF GROSS TOTAL INCOME, DEDUCTION UNDER CHAPTER VIA FROM G TOTAL INCOME AT A POSITIVE FIGURE WAS NOT DETERMINE AND NO TAX AT ALL WAS PAYABLE WHICH ARE PRECONDITIONS FOR APPLICATION OF SECTION 115JB. THE LD. AO ERRED BY IGNORING THE ORDER OF THE CIT(A) IN THE A.YEARS 97 WHICH BY FOLLOWING THE DECISION OF THE SUPREME COURT CITED IN 128 ITR 294 HELD THAT PROVISIONS OF SECTION 115J, 115JB ARE NOT APPLICABLE. ACCORDING TO THE AR THE AO WAS WRONG IN NOT CONSIDERING IN THE SEPARATE PROFIT AND LOSS ACCOUNT PREPAR ED FOR DETERMINING BOOK PROFIT AS REQUIRED U/S. 115JB(2) AND AS PER THE ORDER OF CALCUTTA TRIBUNAL IN THE CASE OF BALRAMPUR CHINI MILLS LIMITED IN ITA NO. 1061/K/2003 FOR A.Y. 2000 1997-98. 10.1. THE ITAT D BE NCH OF THE TRIBUNAL IN THE IN THE ASSESSEES OWN CASE IN ITA NO. 1761/KOL/2005, UPHELD THIS ORDER OF THE LD. CIT(A) BY HOLDING THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION IN THE ASSESSEES OWN CASE AS WELL AS BY A BUNCH OF 19 THE UNITED PROVINCES SUGAR COMPANY LTD. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION FOR INTERFERING WITH THIS FINDING AS WELL. WITH THIS QUESTION NO. 3 ALSO STANDS ANSWERED AGAINST THE ASSESSEE. ULT THE APPEAL WARRANTS TO BE DISMISSED WHICH IS DISMISSED. A PERUSAL OF THE PROPOSITIONS OF LAW LAID DOWN IN ALL THESE CASE - CONCLUSION THAT THE LD. CIT(A) CANNOT TOUCH OR DELVE ON ANY ISSUE WHICH DOES NOT ARISE ASSESSMENT AND WHICH WAS OUTSIDE THE SCOPE OF OR AN ISSUE WHICH IS NOT THE ORDER OF THE ASSESSMENT. IN THE CASE ON HAND, THE ISSUE OF COMPUTATION OF BOOK PROFITS U/S 115JB OF THE ACT WAS NOT AN ISSUE THAT WAS A SUBJECT URSE OF ASSESSMENT PROCEEDINGS . THIS ISSUE OF COMPUTATION OF BOOK PROFITS U/S 115JB OF THE ACT, DOES NOT ARISE FROM THE ORDER OF THE ASSESSMENT. SECTION SELF CONTAINED CODE AS PER THE CBDT CIRCULAR NO. 13/2001, DT. AND WAS OUTSIDE THE SCOPE OF THE ORDER OF ASSESSMENT PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT ON 21/12/2015. THE LD. CIT(A), IN OUR VIEW, IS NOT EMPOWERED TO ENHANCE THE ASSESSMENT BY COMPUTING BOOK PROFITS U/S 115JB OF THE ACT, THUS, WE UPHOLD THIS CONTENTION OF THE ASSESSEE AND ADJUDICATE THIS ISSUE ON POWERS OF ENHANCEMENT OF THE CIT(A), ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN FAVOUR OF THE ASSESSEE. THUS, WE QUASH THE ENHANCEMENT MADE BY THE LD. CIT(A). COMING TO THE ISSUE ON MERITS, WE FIND THAT THE LD. CIT(A) WHILE DISPOSING OFF THE ER FOR THE ASSESSMENT YEAR 2004-05 IN THE ORDER DT. 08/04/2005, 13. GROUND NO. 5, 6 & 7 ARE RELATING TO MAT ON BOOK PROFIT UNDER SECTION 115JB AS PER THE AR THE AO WAS WRONG IN HOLDING THAT SECTION 115JB WAS APPLICABLE IN THE CASE OF THE ASSESSEE AND WAS ALSO WRONG IN COMPUTING BOOK PROFIT AND TAX U/S. 115JB WHEN THERE WAS NO COMPUTATION OF GROSS TOTAL INCOME, DEDUCTION UNDER CHAPTER VIA FROM G ROSS TOTAL INCOME COULD NOT BE ALLOWED AND TOTAL INCOME AT A POSITIVE FIGURE WAS NOT DETERMINE AND NO TAX AT ALL WAS PAYABLE WHICH ARE PRECONDITIONS FOR APPLICATION OF SECTION 115JB. THE LD. AO ERRED BY IGNORING THE ORDER OF THE CIT(A) IN THE A.YEARS 97 - 98 WHICH BY FOLLOWING THE DECISION OF THE SUPREME COURT CITED IN 128 ITR 294 HELD THAT PROVISIONS OF SECTION 115J, 115JB ARE NOT APPLICABLE. ACCORDING TO THE AR THE AO WAS WRONG IN NOT CONSIDERING IN THE SEPARATE PROFIT AND LOSS ACCOUNT ED FOR DETERMINING BOOK PROFIT AS REQUIRED U/S. 115JB(2) AND AS PER THE ORDER OF CALCUTTA TRIBUNAL IN THE CASE OF BALRAMPUR CHINI MILLS LIMITED IN ITA NO. 1061/K/2003 FOR A.Y. 2000 - 01 AND IN ITA NO. 1422/C/19 FOR ASSTT. YEAR NCH OF THE TRIBUNAL IN THE IN THE ASSESSEES OWN CASE IN ITA NO. 1761/KOL/2005, UPHELD THIS ORDER OF THE LD. CIT(A) BY HOLDING THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION IN THE ASSESSEES OWN CASE AS WELL AS BY A BUNCH OF ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION FOR INTERFERING WITH THIS FINDING AS WELL. WITH - LAW, TAKES US TO THE ISSUE WHICH DOES NOT ARISE OR AN ISSUE WHICH IS NOT THE ORDER OF THE ASSESSMENT. IN THE CASE ON HAND, THE ISSUE OF AN ISSUE THAT WAS A SUBJECT OF COMPUTATION OF BOOK DOES NOT ARISE FROM THE ORDER OF THE ASSESSMENT. SECTION AS PER THE CBDT CIRCULAR NO. 13/2001, DT. AND WAS OUTSIDE THE SCOPE OF THE ORDER OF ASSESSMENT PASSED BY THE THE LD. CIT(A), IN OUR VIEW, IS NOT EMPOWERED TO ENHANCE THE ASSESSMENT BY COMPUTING BOOK PROFITS U/S 115JB OF THE ACT, THUS, WE UPHOLD THIS CONTENTION OF THE ASSESSEE AND ADJUDICATE THIS ISSUE ON POWERS OF ENHANCEMENT OF THE CIT(A), ON THE FACTS AND CIRCUMSTANCES OF THE THUS, WE QUASH THE ENHANCEMENT MADE BY THE LD. CIT(A). COMING TO THE ISSUE ON MERITS, WE FIND THAT THE LD. CIT(A) WHILE DISPOSING OFF THE 08/04/2005, HAS HELD AS 13. GROUND NO. 5, 6 & 7 ARE RELATING TO MAT ON BOOK PROFIT UNDER SECTION 115JB AS PER THE AR THE AO WAS WRONG IN HOLDING THAT SECTION 115JB WAS APPLICABLE IN THE CASE OF THE ASSESSEE AND WAS ALSO WRONG IN COMPUTING BOOK PROFIT AND TAX U/S. 115JB WHEN THERE WAS NO COMPUTATION OF GROSS TOTAL INCOME, ROSS TOTAL INCOME COULD NOT BE ALLOWED AND TOTAL INCOME AT A POSITIVE FIGURE WAS NOT DETERMINE AND NO TAX AT ALL WAS PAYABLE WHICH ARE PRECONDITIONS FOR APPLICATION OF SECTION 115JB. THE LD. AO 98 AND 2001-02 IN WHICH BY FOLLOWING THE DECISION OF THE SUPREME COURT CITED IN 128 ITR 294 HELD THAT PROVISIONS OF SECTION 115J, 115JB ARE NOT APPLICABLE. ACCORDING TO THE AR THE AO WAS WRONG IN NOT CONSIDERING IN THE SEPARATE PROFIT AND LOSS ACCOUNT ED FOR DETERMINING BOOK PROFIT AS REQUIRED U/S. 115JB(2) AND AS PER THE ORDER OF CALCUTTA TRIBUNAL IN THE CASE OF BALRAMPUR CHINI MILLS LIMITED IN ITA 01 AND IN ITA NO. 1422/C/19 FOR ASSTT. YEAR NCH OF THE TRIBUNAL IN THE IN THE ASSESSEES OWN CASE IN ITA NO. 1761/KOL/2005, UPHELD THIS ORDER OF THE LD. CIT(A) BY HOLDING THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION IN THE ASSESSEES OWN CASE AS WELL AS BY A BUNCH OF APPEALS F ILED BY THE REVENUE ON THIS ISSUE. THE REVENUE CARRIED THE MATTER BEFORE THE HONBLE CALCUTTA HIGH COURT. THE HONBLE HIGH COURT HELD AS FOLLOWS: WE HAVE PERUSED THE ORDER PASSED BY THE TRIBUNAL. IT APPEARS THAT THE TRIBUNAL HAS EXTENSIVELY DEALT WITH TH INVOLVED WHICH IS REQUIRED TO BE DECIDED BY THIS COURT. WE THEREFORE, DO NOT FIND ANY REASON TO ADMIT THE APPLICATION. HENCE, THIS APPLICATION IS DISMISSED. 10.1.1. FROM THE ABOVE, IT IS CL HONBLE JURISDICTIONAL HIGH COURT. THE LD. CIT(A) WAS IN ERROR IN HOLD THAT THE DECISIONS OF THE TRIBUNAL WAS SUB- SILENTIO INCOME TAX DEPAR TMENT ITSELF, HAS NOT BEEN BRINGING TO TAX BOOK PROFITS U/S 115JB OF THE ACT EXCEPT FOR THE ASSESSMENT YEAR 2005 TI ARE NIL- OR NEGATIVE . THE LD. CIT(A) WAS IN ERROR IN REFUSING TO FOLLOW THE RATIO OF THE JU DGMENT LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AND IN FOLLOWING THE RATIO LAID DOWN BY THE LUCKNOW BENCH OF THE ITAT. THE MERITS OF THE ISSUE ARE A MATTER OF INTERPRETATION, AS TO HOW WE SHOULD INTERPRET THE SAME IS OF NO RELEVANCE, WHEN A BINDI DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IS ALREADY BEFORE US AND WE ARE BOUND TO FOLLOW THE SAME. THUS, THIS ISSUE WHETHER BOOK PROFITS CAN BE COMPUTED U/S 115JB OF THE ACT, WHEN THE GTI AND TI OF THE ASSESSEE ARE NIL AND NO TAXES PAYABLE, IS FAVOUR OF THE ASSESSEE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTION HIGH COURT ON THIS ISSUE. NO OTHER ARGUMENTS ARE RAISED BEFORE US. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE SD/- [ ABY T. VARKEY ] JUDICIAL MEMBER DATED: 01.04.2021 {SC SPS} 20 THE UNITED PROVINCES SUGAR COMPANY LTD. ILED BY THE REVENUE ON THIS ISSUE. THE REVENUE CARRIED THE MATTER BEFORE THE HONBLE CALCUTTA HIGH COURT. THE HONBLE HIGH COURT HELD AS FOLLOWS: - WE HAVE PERUSED THE ORDER PASSED BY THE TRIBUNAL. IT APPEARS THAT THE TRIBUNAL HAS EXTENSIVELY DEALT WITH TH E MATTER. WE DO NOT FIND THAT ANY SUBSTANTIAL QUESTION OF LAW IS INVOLVED WHICH IS REQUIRED TO BE DECIDED BY THIS COURT. WE THEREFORE, DO NOT FIND ANY REASON TO ADMIT THE APPLICATION. HENCE, THIS APPLICATION IS DISMISSED. FROM THE ABOVE, IT IS CL EAR THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURT. THE LD. CIT(A) WAS IN ERROR IN HOLD THAT THE DECISIONS OF SILENTIO , WHEN THE HONBLE HIGH COURT HAS UPHELD THE SAME. THE TMENT ITSELF, HAS NOT BEEN BRINGING TO TAX BOOK PROFITS U/S 115JB OF THE ACT EXCEPT FOR THE ASSESSMENT YEAR 2005 -06 IN THE CASE OF THE ASSESSEE WHEN THE GTI AND . THE LD. CIT(A) WAS IN ERROR IN REFUSING TO FOLLOW THE RATIO OF THE DGMENT LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AND IN FOLLOWING THE RATIO LAID DOWN BY THE LUCKNOW BENCH OF THE ITAT. THE MERITS OF THE ISSUE ARE A MATTER OF INTERPRETATION, AS TO HOW WE SHOULD INTERPRET THE SAME IS OF NO RELEVANCE, WHEN A BINDI DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IS ALREADY BEFORE US AND WE ARE BOUND TO FOLLOW THE SAME. THUS, THIS ISSUE WHETHER BOOK PROFITS CAN BE COMPUTED U/S 115JB OF THE ACT, WHEN THE GTI AND TI OF THE ASSESSEE ARE NIL AND NO TAXES PAYABLE, IS FAVOUR OF THE ASSESSEE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTION HIGH COURT ON THIS ISSUE. NO OTHER ARGUMENTS ARE RAISED BEFORE US. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 1 ST DAY OF APRIL, 2021. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. ILED BY THE REVENUE ON THIS ISSUE. THE REVENUE CARRIED THE MATTER BEFORE THE WE HAVE PERUSED THE ORDER PASSED BY THE TRIBUNAL. IT APPEARS THAT THE TRIBUNAL HAS E MATTER. WE DO NOT FIND THAT ANY SUBSTANTIAL QUESTION OF LAW IS INVOLVED WHICH IS REQUIRED TO BE DECIDED BY THIS COURT. WE THEREFORE, DO NOT FIND ANY REASON EAR THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURT. THE LD. CIT(A) WAS IN ERROR IN HOLD THAT THE DECISIONS OF , WHEN THE HONBLE HIGH COURT HAS UPHELD THE SAME. THE TMENT ITSELF, HAS NOT BEEN BRINGING TO TAX BOOK PROFITS U/S 115JB OF THE IN THE CASE OF THE ASSESSEE WHEN THE GTI AND . THE LD. CIT(A) WAS IN ERROR IN REFUSING TO FOLLOW THE RATIO OF THE DGMENT LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AND IN FOLLOWING THE RATIO LAID DOWN BY THE LUCKNOW BENCH OF THE ITAT. THE MERITS OF THE ISSUE ARE A MATTER OF INTERPRETATION, AS TO HOW WE SHOULD INTERPRET THE SAME IS OF NO RELEVANCE, WHEN A BINDI NG DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IS ALREADY BEFORE US AND WE ARE BOUND TO FOLLOW THE SAME. THUS, THIS ISSUE WHETHER BOOK PROFITS CAN BE COMPUTED U/S 115JB OF THE ACT, WHEN THE GTI AND TI OF THE ASSESSEE ARE NIL AND NO TAXES PAYABLE, IS ADJUDICATED IN FAVOUR OF THE ASSESSEE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTION SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1. THE UNITED PROVINCES SUGAR 1 ST FLOOR, CHARTERED BANK BUILDING 4, NETAJI SUBHASH ROAD KOLKATA 700 001 2. INCOME TAX OFFICER, WARD- 12(2), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 21 THE UNITED PROVINCES SUGAR COMPANY LTD. THE UNITED PROVINCES SUGAR COMPANY LTD FLOOR, CHARTERED BANK BUILDING 12(2), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 1956/KOL/2018 ASSESSMENT YEAR: 2013-14 THE UNITED PROVINCES SUGAR COMPANY LTD. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES